- Food delivery applications are complicated because they make little profit: the business model is collapsing little by little.
- One of the strategies followed by many of these firms is diversification and, along this path, financial services are a frequent alternative.
- Rappi, through RappiPay, obtained the licenses to offer digital banking services after approval from the Colombian financial regulator.
Delivery apps, in most cases, are in profit trouble. In many cases, they ignored some of the basic principles of the business world to sustain their growth and now face falling revenues, layoffs, stock collapses, and a real battle with the competition for survival.
As a strategy to overcome this turning point in their business, some appeal to diversification. In many cases, they enter the segment of means of payment.
Like Rappi, which through RappiPay has been offering a credit card and online deposit account for some time, as well as other financial services in Colombia, Mexico, Brazil, Peru and Chile, depending on local regulations.
Nevertheless, it did not offer the full services of an online bank. Until now.
Rappi is an online bank in Colombia
This Friday, June 17, it was announced that Rappi, the delivery application that has the support of the Japanese SoftBank, will be able to offer digital banking services after the approval of the Colombian financial regulator.
Colombia’s financial regulator authorized RappiPay, a company made up of Rappi and the Banco Davivienda bank, to carry out digital bank financial operations in that country.
In RappiPay accounts, which until now functioned as an electronic wallet, deposit and savings products will be offered as a financial institution through the same platform,” the company said.
In Colombia, RappiPay has more than 800,000 users and has already issued more than 200,000 credit cards.
According to market data, Rappi and Davivienda signed an agreement at the end of 2021 to invest 100 million dollars in the creation of the financial platform that has now been transformed into a bank, with the rights and duties of any entity with these characteristics.
Rappi, founded in 2015 in Colombia, received 1,000 million dollars from Japan’s SoftBank.
Rappi has operations in 245 cities in 9 Latin American countries, including Mexico, Peru and Argentina.
In August 2021, the delivery company received just over $510 million in a funding round, bringing its valuation to more than $5.2 billion.
The diversification strategy
Diversification at Rappi is a constant. A few years ago, he launched Rappifavor, a vertical that solved helping people who didn’t have the time to do favors, for example: pick up some keys, carry a document or pick up food.
He is not doing badly with the payment and credit business in Mexico. Last year, Rappicard was the largest credit card issuer in this country with more than 500,000 cards, well above traditional banking.
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