Stefany Bello, Senior Vice President of Partnerships, Retail and Commerce for Latin America and the Caribbean at Mastercard, has just presented a study on the increasingly growing impact of remittances in the region and Portafolio spoke with her.
What does your division at Mastercard do?
We make digital alliances with big players such as Amazon or Mercadolibre, Spotify, electronic wallets, gaming, digital giants such as Microsoft, Samsung, Apple, Google among others. Everything that starts from the digital world and five segments, one of them where the remittance part falls, telecommunications companies, retailers, hotels, airlines and online agencies among others and CPGs such as the Bimbo and Coca Cola companies. Everything that is not the world of traditional banking falls under my vertical.
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How much does that segment weigh on Mastercard’s business?
MasterCard has always been proud to work with all banks globally, but the industry has changed a lot and we have many new players and we have diversified, not only offering the world of cards, but we are a company that has several rails to be able to serve this segment. , but beyond that we have also made many investments in the world of loyalty or loyalty in the world of cybersecurity and fraud in the world of consulting data and the goal is that future growth beyond the world of banking will come Of all these segments beyond the ones that I manage particularly, we have also made many investments in the world of fintech and in the world of government. In the world of fintech Mastercard has between 80 and 85% of the market and in Brazil and Mexico even 90% and in the world of government we have also been advancing the digitalization of alliances with governments to promote digitalization and cybersecurity.
And strengthen relationships with digital allies, retail, fintech and government.
What did the study show?
We work with the official figures for 2022 and when we begin to see the figures globally, remittances were US$ 785,000 million and to Latin America they were US$ 146,000 million, we realize that a large part of that money sent is in cash and we see how many sectors have been digitalized and that is why the world of fintech has been advancing rapidly, but I see that the world of remittances is a little more behind and that brings different challenges, which does not mean that cash is going to disappear, but that we have an opportunity where cash and the digital world will coexist in the digitalization of these resources, since we have to give consumers an omnichannel solution, where they can send and receive in the ways they understand and want to do so.
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What is the situation by country?
Of those US$ 146,000 million to the region, US$ 61,000 million arrived in Mexico, and US$20,000 million in Guatemala, which represents 20% of their gross domestic product. Around US$10 billion arrived in Colombia in 2022, but Colombia also sends money to other countries, mostly to Venezuela for around US$1.7 billion.
In Colombia specifically we see how this distribution, both to receive and send it, is still mostly in cash. That is why we believe that both with our solutions and with different alliances that we could make, we can advance this digitalization.
What are the challenges?
The study, as well as others that have been carried out by various organizations, talk about the costs that consumers have, since today the cost of a remittance in Latin America is between 6% and 25% while the UN says that this cost should be 3%. This indicates that there is a great opportunity to reduce these costs by digitizing remittances and by doing so we can offer you a better experience, new services and loyalty programs and benefits, because we know that each month that consumer usually goes to the same place to send remittances.
Do you know what the average amount of a remittance to Colombia is?
Between US$ 154 and US$ 420. 70% is received by the financial system, 23% by businesses and 7% by fintech.
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How to lower costs?
When cash is sent different players intervene and digitally, it is usually reduced as well as the cost and we are working with the players to do that.
HOLMAN RODRIGUEZ MARTÍNEZ
Portfolio Journalist
