In a context of less available investment, fintech companies must be more efficient in issuing debit and credit cards to continue growing and offering their services to a greater number of people.
According to the financial technology company, Pomelo, in particular, the reduction in available investment can affect fintech companies that are in the early stages of their development, since they usually require more investment to grow.
Read more about the importance of issuing cards by fintech companies and find the most important financial news of the day with our companion app Born2Invest.
Fintech companies that are already established and have a solid customer base may be in a better position to weather the storm
“Before, it was okay for a fintech company to raise money and spend months working without generating income, but it is no longer possible today, companies have to show results. This means that a fintech company that raised money very quickly has to enter the market with a product, generate income and show profitability,” said Juan Fantoni, co-founder of Pomelo.
The fintech company indicated that technologies with a robust cloud infrastructure have allowed a significant reduction in time in various processes for infrastructure and card issuance in the financial segment.
The processes for launching a card are extensive and begin by identifying the type of cards that can be created for customers, defining whether they will be used for local or international purchases, among other characteristics.
In addition, Pomelo pointed out that it is essential to ensure the necessary technological infrastructure, which includes the implementation of Application Programming Interfaces that intervene so that the card communicates with the different components of the financial ecosystem.
Finally, fintech companies must also consider the manufacturing and distribution of plastics, testing and product launch, for which it is key to subject the cards and their systems to rigorous quality and security tests.
“This strategy works well when the product arrives in the short term, if the product takes off much later it is counterproductive, because a client who showed interest and receives it after a year, when he does not require it or is no longer interested. There is a very linear relationship between the delivery time of a financial product to people and the activity they have,” Fantoni added.
Opportunity in payments
According to a report by the consulting firm BCG, in Latin America the income of the payments industry increased 12% between 2017 and 2022, to a value of 120,000 million dollars and it is projected that by 2027 it will grow at a rate of 8.3% until reaching a value of 179,000 million dollars.
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First published in EL ECONOMISTA. A third-party contributor translated and adapted the articles from the originals. In case of discrepancy, the originals will prevail.
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