Uber gets new license for fintech in Mexico

Uber, the prominent American mobility company, is commencing its fintech operations in Mexico, marking its latest move to expand financial services globally.

Following the issuance of a fintech license from local regulators in Mexico, Uber is set to enhance its offerings in Latin America’s second-largest economy. This license has the potential to pave the way for virtual wallets, debit cards, and credit card products within the country, which boasts a population of 130 million.

Nearly a decade after its inception, Uber has ventured into the fintech sector on a global scale. The introduction of Uber Money in the United States in 2019 served as a precursor to its expansion into new countries. Earlier this year, Uber entered into a partnership with payments fintech Stripe, illustrating its commitment to cost reduction and the integration of novel payment methods as part of its comprehensive fintech strategy.

With the recent acquisition of the Mexican fintech license, Uber aims to broaden its fintech services within one of Latin America’s most promising markets. According to figures from 2021, Uber boasts more than 200,000 drivers and serves over 8 million customers in Mexico.

Having initiated the licensing process in 2019, Uber navigated Mexico’s regulatory landscape, which requires digital banking service providers to obtain licenses. Although the licensing process has proven intricate, only a limited number of fintech firms have successfully secured approvals.

Nonetheless, the fintech sector in Mexico has demonstrated substantial growth, witnessing a double-digit expansion in the number of financial technology companies in recent years. As Latin American societies increasingly digitise, traditional banks and non-financial entities have shown a keen interest in offering digital services.

The fintech ecosystem now encompasses around 650 companies, a notable increase from approximately 500 at the end of 2021.

Uber initiated its digital wallet concept in the United States, aiming to provide users with real-time access to their trip earnings. It subsequently introduced Uber debit cards and accounts for its drivers, along with a Visa credit card option.

Although Uber Money expanded to various markets, it had not yet been introduced in Mexico. While details of its plans remain undisclosed, it is anticipated that this new payment method will allow users to store funds in a digital account and access associated cards.

Uber stated that the new license will enhance the overall user experience in Mexico. A company spokesperson indicated that “payment processing for the app will remain the same” and that the license’s focus is on optimising the in-app experience, with future possibilities in mind.

Uber’s entry into the Mexican fintech landscape follows in the footsteps of its mobility competitor, Didi. The Chinese ride-hailing platform introduced Didi Pay and Didi Loans in Mexico, claiming to have granted over 5 million loans in just two years of operation.

Uber has refrained from providing further insights into its potential launch of credit capabilities or the detailed roadmap for its fintech products in Mexico.