Mexico’s Fintech Law, enacted in 2018, set a pioneering regulatory framework for financial technology companies in Latin America and globally. This law was designed to govern companies already operating in Mexico, primarily focusing on two types: Electronic Payment Funds Institutions (IFPE) and Collective Financing Institutions (IFC). According to financial analyst Ernesto Calero, the regulation targets these institutions due to their public resource acquisition activities.
Since the law’s inception, the National Banking and Securities Commission (CNBV) has authorized approximately 72 companies. However, more than 30 license applications have been rejected, with the actual number possibly higher due to undisclosed withdrawals from the regulatory process, as noted by Sebastián De Lara, a local industry director.
Analysts describe the Mexican fintech law as rigorous, similar to traditional banking regulations. The transition from startup to a regulated financial institution is challenging, requiring compliance with stringent standards. Calero and De Lara agree that the CNBV aims to ensure user safety, often advising companies to withdraw their license applications if they don’t meet the necessary conditions.
Examples of rejected applications include Ethos Pay and Aceptado Digital, which faced issues like incomplete financial model descriptions, insufficient information, and errors in financial feasibility studies. Calero acknowledges these complex and costly requirements as essential for the authorities to conduct a thorough risk analysis.
Despite the regulator’s strictness, both experts acknowledge the CNBV’s efforts to facilitate license approvals. However, austerity measures have led to staff reductions, complicating the processing of an increasing number of applications. De Lara notes that while initial processing times were around a year and a half, they have now been reduced to a year or less, with some applications being processed in just seven to eight months.
