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Brazilian fintech Nubank has received a licence from the National Banking and Securities Commission to transform its Mexican subsidiary, Nu Mexico, into a bank.
It is the first Sociedad Financiera Popular (SOFIPO), microfinance organisations for low-income consumers, in Mexico to get a banking licence, Nubank said.
Nu Mexico will go through a regulatory audit before beginning banking operations and until then would continue to operate as a SOFIPO during the transformation process, it added.
Global strategy
David V矇lez, CEO and founder of Nubank, said Mexico was a key pillar of Nubanks global strategy.
We have invested more than US$1.4 billion (瞿1.05 bn) in the market, not only for growth, but also to drive innovation and raise the standards of the local financial sector, Velez said.
He added: Our mission to challenge the status quo for the benefit of our customers has led us to pioneer the transition from SOFIPO to bank, a milestone that we are confident will further stimulate innovation and competition in Mexico.
Nubank entered the Mexican market in 2019, launching a no-fee credit card in 2020. In the fourth quarter of 2024, Nu surpassed 10m customers and US$4.5bn in deposits.
Nubank said it believes that Mexico, with the highest GDP per capita in Latin America, a highly concentrated banking sector, low financial inclusion and high technology adoption rates, represents a distinct opportunity in the region. Its portfolio now includes a debit account, personal loans and credit building cards.
An ongoing trend
Consumers in Mexico, Brazil and Argentina are increasingly shifting away from cash towards credit, debit or mobile payments.
The disruption of Latin Americas traditional payments model, which used to be dominated by cash, has created opportunities for fintechs like Nubank.
In Brazil, Pix, the central bank-operated instant payments system that launched in 2020, has become Brazils preferred method of payment, surpassing debit and credit and rendering cash almost obsolete.
Mexico took a head start in fintech regulation with laws introduced in 2018 but progress has slowed in recent years.
