Five Questions With: Fintoc

This fintech allows businesses to receive online payments in a more convenient way than cards and in a simpler way than transfers. People pay without intermediaries and without entering bank details, only with their cell phone number.

Fintoc wants these payments, known as A2A (account-to-account), to become the dominant method in the region and to achieve this they connect directly with the local infrastructure in each country and develop agreements with banks. The company was founded in Chile, backed by Y Combinator and with clients such as BCI, Xepelin and Houm, this month they are officially launching their product in Mexico. Cristóbal Griffero, co-founder and CEO, answered Contxto’s questionnaire.

What problem does Fintoc solve?
Fintoc allows any business to receive online payments in a convenient way. Companies in LatAm do not have the margins of companies in more developed markets. A simple 2% or 3% in payment commissions represents a very relevant percentage of the commercial margin. At Fintoc we reduce this commission by up to 70% compared to traditional payment methods, while improving user experience and conversion.

Cristóbal Griffero, co-founder and CEO of Fintoc. (Photo: Fintoc)

How is it different from others who have tried this idea before?
Fintoc’s advantage is that we build our entire payment architecture on the local rails of each country in which we operate. With this approach, we cut out all the intermediaries in the traditional payment chain (card payments). This is known as account-to-account payments, which enable direct transactions between individuals and merchants, lowering transaction costs dramatically. It also reduces the need for short-term funding (traditional payment methods do not send money directly to the merchant). Another important benefit is that the risk of chargebacks is zero, since you can only pay with money you have available and not with credit. This increases the incentives for merchants to accept digital payments, which in turn boosts banking penetration in the region.

How do you generate revenue?
We charge a fee for each transaction. For bank reconciliation products, we charge per connected bank account.

What achievement of Fintoc are you most proud of?
For an alternative payment method to take off, you need one key factor: end-consumer adoption. In that sense, what the team has achieved is that Fintoc is available and adopted over traditional payment methods in massive applications such as public transportation in Chile. In that sense, what makes me most proud is to be able to see how Fintoc is used in everyday products and also in more sophisticated applications such as investment platforms. Being able to use your own product several times a day is priceless.

Tell us a Latin American startup that you admire.
A lot has been said about the big names, so I’m going for a lesser-known one. Besides Fintoc, I like what Copilot is doing. It is a personal finance manager, a competitor of Mint. They are in a tough category and have over 4.8 stars in the App Store with a solid base of paying users. I admire how much they have done that with a small team (I understand almost 100% Chilean) in a more sophisticated market like the US.


Main image: Fintoc.

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