According to a survey conducted by Routefusion, a company for cross-border payments, 66.67% of companies that have clients or suppliers abroad and only use the traditional banking system to carry out their transactions, have been significantly affected by problems with sending and receiving money abroad. The study also indicates that 72% of these companies have not recorded growth in their business since the beginning of the pandemic, mainly due to these limitations. This was reported to Cointelegraph en Español through a statement.
Currently, one of the main causes of growth of international business in companies, in entrepreneurship and in a large part of financial inclusion in Mexico, are the services offered by fintech. Thanks to these new platforms, all types of transactions that benefit the Mexican economy have been streamlined and made more efficient.
Although traditional banking has been challenged by the arrival of these alternatives and, consequently, they have evolved in their technology and financial services, companies continue to face a number of challenges in conducting international transactions that hinder the growth of your business.
Alfred Pepping, director of Latin America for Routefusion, shared that some of the great obstacles that companies faced when making their payments abroad with traditional banking services, are the too high costs and waiting time, followed by uncompetitive exchange rates they find, as well as the excessive bureaucracy and lack of transparencywhich represents a disadvantage to increase business abroad, unlike those companies whose dynamics have been benefited thanks to alternatives that fully solve the inconveniences with traditional banking.
Pepping explained: “These problems, together with the low rates of financial inclusion in the country, where only 68% of the population has any formal financial product (an index that has hardly changed in the last 30 years), allow companies like Routefusion to be a excellent alternative to boost the business of companies, especially, and also an opportunity even for foreign investment, for the creation of new businesses, acquire new clients, or hire professionals in other countries”.
A study carried out with the collaboration of Santander Mexico, the British Embassy in Mexico, Finnovista and Google, revealed that the Fintech ecosystem is responsible for 3,600 direct jobs and benefits more than 4.5 million registered users of its services. 56% of these companies have between 1 and 10 employees; followed by 22% that is between 11 and 25 direct jobs.
Compared to companies that have not seen growth in their business, Routefusion found from the survey it commissioned, that 63.06% of companies that used alternative platforms for their cross-border payments had significant growth in the same period of time as those who had complications with traditional banking.
Colton Seal, CEO and co-founder of Routefusion added that “The research they carried out had the purpose of discovering, through interviews with vice presidents, general directors, managers and high-level officials in Mexico, the importance of benefits that Routefusion offers as an alternative, and in this way boost business growth. and financial inclusion without the hassles associated with traditional financial services“. He also emphasized: “We have the ability to pay locally in more than 140 currencies, and schedule payments of all kinds such as ACH, SPEI, SEPA and SWIFT, and resolve issues of income, contracts, associations and financial definitions efficiently, which allows our users continue with their economic activities without the limitations with which they often find themselves in a more traditional system”.
According to the Fintech Mexico association, both Mexico, like Brazil and Colombia, are the main Fintech markets in Latin America. During 2020 they raised more than 3 billion dollars, a great opportunity for economic development. However, according to the World Bank, the percentage of the adult population with access to an account in the Mexican financial system is 54.4%, a figure lower than the world average (68.5%) and still far from the figure for high-income countries. income (93.7%).
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