mexico pauses government approval of fintechs due to covid-19

Mexico pauses government approval of fintechs due to Covid-19

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Contxto – Government bureaucracies in Latin America are notoriously sluggish. Factor in a pandemic and authorities’ speed for managing other affairs slows to a crawl. So it’s bad news for over 80 fintechs awaiting approval from the Mexican government.

According to media outlet El CEO, the country’s National Banking and Securities Commission (CNBV for its Spanish acronym) announced it would suspend some revisions it had programmed. Among those suspensions was its evaluation of 95 fintechs that wanted the government’s greenlight. 

The waiting game in Mexico continues

Fintechs that made the deadline to apply for the government’s approval were told their revision process would take 90 days to be completed.

So far, the only fintech that’s been publicly disclosed to have the CNBV’s approval is NVIO Pagos. And that was way back in January. As it turned out, this fintech got ahead of the curve because it sought government approval prior to even launching its operations. 

Buuut, coronavirus (Covid-19) came in to ruin all of that. 

Now the process has been put on hold until the health crisis calms down. Moreover, given that the pandemic in Mexico is still in phase two, it’s going to be a long wait for some fintechs.

The “good news” is that the CNBV may expedite some cases or grant them its good blessings under specific conditions. These exceptions would apply for fintechs whose services help with the ongoing pandemic. 

According to Carlos Valderrama, Founding Partner at LegalParadox, fintechs that assist small and medium-sized enterprises (SMEs) or individuals may have an advantage in that regard.

A time for fintechs

It’s somewhat of a relief that the CNBV is flexible enough to consider fintechs that tender to the ongoing pandemic. Despite everyone staying home, moving money is still necessary. 

And first-time users of these digital apps may feel more comfortable knowing that that fintech is government-approved.

Correspondingly, it’ll be interesting to see within the coming weeks if any fintechs get on the CNBV’s good side. Not so much for their sake, but for users who risk their health and that of others by leaving home to access an ATM machine.

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