According to PayNXT360, Embedded Finance industry in Mexico is expected to grow by 35.0% on annual basis to reach US$5,753.7 million in 2024.

The embedded finance industry is expected to grow steadily over the forecast period, recording a CAGR of 24.7% during 2024-2029. The embedded finance revenues in the country will increase from US$5,753.7 million in 2024 to reach US$17,370.9 million by 2029.

The Mexican embedded finance market is poised for significant growth, driven by rising smartphone penetration, a large unbanked population, and increasing demand for convenient financial services. The COVID-19 pandemic accelerated the mobile/contactless payments trend that had already begun in Mexico. Embedded finance, or the possibility to offer financial services through different platforms, represents a good opportunity for fintech companies to partner with retailers and other industries.

Major Drivers of Mexico Embedded Finance Market: With over 650 fintech start-ups, Mexico is one of the largest fintech markets in Latin America. According to recent industry studies, it is one of the most active countries backing financial technology ventures. Most Mexican fintech companies are focused on payments and remittances, personal financial management, crowdfunding, and lending. Due to the COVID-19 pandemic, the number of Mexican fintech startups increased more than 14 percent, especially in the digital banking and insurtech segments.
• In Mexico, over 85 percent of the population has a mobile phone, and many cannot afford to own a computer. Therefore, many rely on their phones to conduct financial transactions. This provides opportunities for new and improved processes for sending and receiving payments.
• According to the analysis, 44.6% of all fintechs in Mexico have a clear objective: they aim at segments of underbanked individuals and businesses. However, most companies still focus on customers already operating within the traditional financial system, whether individuals or corporations.
• Indeed, the number of Mexicans with savings accounts has increased, but from significantly depressed levels. While in 2015, 44.1% of adults reported having one, in 2021, that number was 49%, still notably lower than in most other Latin American countries. The government will release new results later this year, which could still show some improvement in more recent years.

Major Innovation and Partnership in Mexico Embedded Finance Market: Mexico has experienced a surge in digital payment adoption, driven by factors such as smartphone penetration, government initiatives to promote financial inclusion, and the emergence of fintech companies offering innovative payment solutions.
• In Apr 2024, Nubank, the largest digital lender in Latin America by number of clients, has partnered with a local department store to incorporate cash into its offering. It announced a partnership with Mastercard’s Arcus that will allow its clients to deposit cash in a department store network in the country, thus providing a tool for underbanked Mexicans to gain access to digital banking easily.
• Micro-savings and Investments: Many Mexicans are unbanked or underbanked. Fintech startups like Clip and Albo offer innovative solutions. Clip, a point-of-sale (POS) system provider, integrates micro-savings features, allowing merchants to round up customer transactions and save the difference. Albo, a neobank, provides micro-investment options directly within their app, encouraging users to save and invest even with small amounts.
• Retail and Fintech Alliances: Major retailers are recognizing the potential of embedded finance. Oxxo, a ubiquitous convenience store chain in Mexico, partnered with fintech startup Cuenca to offer digital wallets and financial services to its vast customer base. This partnership leverages Oxxo’s physical presence and Cuenca’s digital expertise, increasing financial inclusion across Mexico.
• Fintech-Telco Collaboration: Telecom companies in Mexico have a vast network of users and established payment infrastructure. Fintech startups are partnering with them to expand financial services. For instance, Telcel, a major telecom provider, partnered with Clip to offer its mobile wallet solution to Telcel users. This broadens Clip’s reach while allowing Telcel to offer enhanced financial services to its customer base.

Major Trends in Mexican Embedded Finance Market: Mexico’s embedded finance market is poised for significant growth in the coming years. Its potential to improve financial inclusion, drive innovation, and boost economic growth makes it a space to watch.
• Focus on Financial Inclusion: Expect embedded finance solutions to cater to the unbanked and underbanked population, offering micro-savings, micro-loans, and simplified insurance products.
• Increased Innovation: Look for innovative embedded finance solutions tailored to specific sectors like retail, transportation, and healthcare.
• Strategic Partnerships: Collaboration between fintech startups, traditional financial institutions, and telecom companies will likely accelerate growth and innovation.
• API-driven Integration: Seamless integration of financial services through APIs will become the norm, creating a more user-friendly and efficient experience.
This report provides a detailed data-centric analysis of the embedded finance industry, covering lending, insurance, payment, wealth and asset based finance sectors market opportunities and risks across a range of different sectors. With over 75+ KPIs at the country level, this report provides a comprehensive understanding of embedded finance market dynamics, market size and forecast.

It breaks down market opportunities by type of business model, consumer segment, and distribution models. In addition, it also provides detailed information across a range of different segment in each sector of embedded finance. KPI revenue help in getting an in-depth understanding of end market dynamics.

PayNXT360’s research methodology is based on industry best practices. Its unbiased analysis leverages a proprietary analytics platform to offer a detailed view of emerging business and investment market opportunities.