Fintech Software Development in Latin America
In the last 10 years, fintech (financial technology) software development, has seen an unprecedented surge in popularity in Latin America as the region’s growing population and need for innovative financial solutions drive demand for digital financial solutions. Some of the most exciting fintech innovations that we’re seeing coming across worldwide are in Latin America. Why? Because a significant portion of the population in Latin America, both consumers and small to medium-sized enterprises, still lacks full access to traditional financial services, creating a substantial opportunity for fintechs offering innovative and accessible software solutions.
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Contact Us Today!Technology-driven financial firms across Latin America have capitalized on this and they have risen as powerful challengers to traditional financial institutions and have become economically sizeable in some segments such as: payment solutions (payment processing, clearing and settlement); alternative finance (credit, loans and fundraising); asset management and capital markets (individual or business account management, trading) et al. This transformation has given rural and low-income individuals the possibility of personal and business loans, access to e-commerce, and expanded markets for small- and medium-sized businesses.
In terms of fintech software development, application programming interfaces (APIs) have streamlined methods of exchanging information between financial providers while advances in artificial intelligence (AI), machine learning (ML) and big data have refined how financial firms assess risks, allowing them to offer personalised financial products. In addition, biometric technology and distributed ledger technology have revolutionised the approach to online security, authentication and cross-validation of information.
As innovative solutions and disruptive technologies continue to reshape the way Latin Americans access and interact with financial services, more and more US and Canadian tech companies are looking to this rapidly evolving fintech ecosystem for unique collaboration opportunities, strategic partnerships, and potential market expansion.
Traditionally, the best areas for fintech software development in the world are Silicon Valley, San Francisco, New York, London, Hong Kong, and Singapore. However, Latin American countries are consistently being ranked as the best places to expand fintech software services in 2025.
Fintech opportunities couldn’t be clearer in Latin America (LatAm), where fintech investment accelerated significantly, driven by technological advancements and increasing demand for digital financial services.
The shift toward online banking is underway evidenced by customer attitudes toward online and mobile finance. An increasing share of the Latin American population envisions handling their financial transactions exclusively via mobile phones, and a similarly high share of bank account holders feel the same way about online finance. Today, the region is home to over 3,000 fintech enterprises, reflecting the region’s rapid adoption of innovative financial solutions. The leading Fintech companies in the region are Nubank (the most dominant player), BNA+ in Argentina, BBVA México, and Bancolombia, all of which have made substantial strides in the digital banking space.
The region received $15.6 billion in investments for financial technology providers over the past 10 years, with Brazilian companies making up 66.7% of the total. Digital services, e-wallets, accounts, and digital banks attracted the most money, with $5.3 billion. But the most deals, and those most often targeted for acquisitions, were in credit fintech.
Regarding the future of investment in fintech, the outlook is optimistic. The flow of capital into Latin American fintech companies is positive, with more than $1.17 billion invested so far this year, a 15% increase compared to the same period in 2023.
The largest country in Latin America and one of the world’s fastest emerging economies, Brazil is unsurprisingly the largest fintech hub in the region. Brazil is clearly leading as the most significant contributor of advanced and emerging fintech technology in Latin America. It is home to the most fintech companies in Latin America — 855 or 31% of the total number of fintech companies in LatAm, including the largest, Nubank, a digital banking giant with over 90 million customers. Other notable ones include TransUnion, Wise, PicPay, FGTS, and Caixa. Their specialization includes B2B services, payment systems, lending, financing, and digital banking.
Under the leadership of the Brazilian Central Bank, Brazil has embarked on a journey towards financial inclusion and innovation. Regulatory reforms have paved the way for fintech companies to thrive, fostering a more competitive and dynamic financial ecosystem. By granting fintech companies greater autonomy and flexibility, regulators have encouraged innovation and competition, ultimately benefiting consumers through improved access to financial services and products.
Online and mobile banking have emerged as major segments within Brazil’s fintech sector, reflecting a broader shift towards digital financial services. This has seen Brazil’s fintech landscape evolving. Many fintech software development firms are recalibrating their business purposes, transitioning from B2C to B2B solutions, which offer more consistent and predictable revenue streams. With the B2B model, ~47% of the companies in Brazil are helping traditional financial institutions and digital-native players in modernizing their infrastructure and incorporating new capabilities.
With a population of nearly 130 million, a vibrant and tech-savvy Generation Z, over 80% internet and smartphone penetration, and a massive economy boosted by nearshoring, it’s unsurprisingly that Mexico is the second largest fintech market in Latin America, trailing only behind Brazil with 773 fintech companies registered at the beginning of 2024.
The country is one of the biggest consumer markets in the world with large banks and financial institutions but low credit penetration and financial inclusion. Fintech software development is booming in the Mexican market and transactions made through mobile devices have experienced significant growth, both in value and volume. Mexico’s fintech market is ripe for disruption and this presents opportunities for US fintech software solutions. Familiar brands like Target and Walmart are already moving into the Mexican fintech scene by launching banking apps.
Most Mexican fintech companies are focused on payments and remittances, mobile banking, personal financial management, crowdfunding, digital lending, and insurtech. On average, Mexico fintechs have the following characteristics:
This indicates that while the sector is growing, financial success is not yet widespread.
Due to the growing importance of the fintech industry in Mexico, the Mexican government published the fintech law back in March 2018, the first in the region to lay out a clear legal framework, facilitating innovation and the entry of new players into the market. This law focuses on the widespread adoption of Open Banking which requires financial institutions to share data via APIs, enhancing Fintech’s ability to access client information. The law also oversees crowdfunding, peer-to-peer (P2P) lending, electronic money services, and virtual assets (cryptocurrencies).
As of 2024, Colombia ranks third in Latin America in the fintech industry, just after Mexico. This correlates with it’s position as South America’s third-largest economy. The number of Colombian fintechs has increased steadily in recent years, with nearly 400 fintech companies operating in the country in 2024 underscoring the country’s growing relevance of as a prominent fintech ecosystem in the region.
Regulation advancements are facilitating increased investments in the sector seeing that there has been greater regulatory certainty for fintech companies. This has allowed digital financial services to have greater development potential with clearer legal frameworks. The country is also trying to make progress with the industry wide adoption of Open Finance, a framework that has become standard in several other Latin American countries like Brazil, Mexico, and Uruguay.
There are also special incentive schemes for investment in fintech businesses most notably VAT exclusion for provision of web pages, servers (hosting), and cloud computing services as well as a tax incentive that allows fintech businesses to convert 50% of their investment into development of their software solutions into a tax credit to offset national taxes.
While the majority of Mexican fintechs are focused on means of payment, in Colombia entrepreneurs are exploiting mainstream banks’ reluctance to provide credit for the bulk of the population. They are busily filling a niche between the banks and the coterie of illegal lenders known as “drop-to-drop,” which typically lend money at abusive rates of interest to needy people.
Owing to this, the lending segment holds the highest share of fintechs in the country, followed by the payments and remittances sectors.
If you are a US fintech software provider seeking to access Colombian customers, you are required to either open a representative office in Colombia, or enter into a referral agreement with a local partner. There are however no requirements or restrictions for hiring fintech software developers in Colombia.
The fintech industry in Argentina has seen remarkable growth, expanding by 36.5% between 2019 and 2024. During this period, the number of fintech ventures surged from 158 to 432. The top sectors within the industry include lending, payments and remittances, wealth management, and financial management, with all but lending seeing substantial growth over the past two years.
Lending poses greater difficulties for both banks and fintechs, due to high inflation and a lack of circulating money. Fintechs in Argentina are therefore more focused on means of payment and investing in services that help customers protect their money, such as Mercado Pago, a digital wallet and payments platform, and Ualá, a mobile app used for managing prepaid debit cards and bill payment services.
81.5% of Argentines use some form of virtual wallet and the total digital assets under management totaled US$330 million in 2024 with Mercado Pago leading the market. Under President Javier Milei’s market-friendly administration, there have been changes in the interoperable transfer system linking bank and virtual accounts leading to more competition. Fintech companies in Argentina can now compete on a level playing field with traditional banks for customer deposits and savings. They are now challenging banks by offering interest-bearing accounts, which are more advantageous than traditional non-interest-bearing savings accounts.
The growth of the fintech industry in Argentina has also been driven by the widespread adoption of cryptocurrencies to mitigate the impacts of inflation. Argentina ranks 15th globally and 2nd in Latin America for cryptocurrency adoption, with Bitcoin and USD-backed stablecoins being the most popular. There are 3 million cryptocurrency users in Argentina as of 2024 and the government has approved the official recognition of Bitcoin in legally binding contracts.
As Argentine fintech companies increasingly focus on serving the unbanked and underbanked populations, US fintech software development firms have an opportunity to generate substantial financial returns by providing fintech solutions for mobile banking, blockchain, AI-driven lending, and cross-border payments.
Uruguay, a regional leader in nurturing technology start-ups, is home to 63 fintech enterprises, which is significant given the country’s population size of just 4 million. ~25% of these firms provide specialist technology to financial institutions, the largest segment. The second-biggest segment is electronic lending, followed by payments and remittances. These technology companies did not simply materialize overnight. Rather, favorable banking regulations, a skilled workforce and a variety of tax incentives have shaped their growth and expansion. As an example, the government has gone for full digitalization by introducing the “Mandatory Financial Inclusion” legislation that requires all businesses to accept electronic payments and convert payrolls to electronic form.
In 2021, the country burst into the global Top 20 in the 2021 edition of the World Bank’s Global Fintech Index and as of 2023, Uruguay has the highest “fintech maturity” index in Latin America, outperforming all other countries in the region.
There is a dynamic tech environment in Uruguay that has been built over decades and the country’s business friendly posture welcomes more capital and people to contribute to the ecosystem. With success stories such as DLocal, Bankingly, Ripio, Astropay, Inswitch, and Prometeo, the ecosystem is growing at a steady pace.
Additionally, Uruguay’s recent entry into the Patent Cooperation Treaty (PCT) strengthens the country’s position as an attractive destination for investors and entrepreneurs in knowledge-based services. This treaty expands opportunities for international collaboration and supports intellectual property protection for innovations developed in Uruguay.
Dubbed as “The Silicon Valley of South America” by Inc Magazine, Uruguay aims to be a regional fintech hub where companies can set up shop and from there expand as they see fit into Latin America. We strongly believe that it is a great country to start fintech software development in Latin America.
While Uruguay boasts excellent fundamentals when it comes to its financial system and talent pool, entrepreneurs still face significant barriers to growth. Despite the Government support, here it is much more difficult for fintech companies to access credit when compared to the United States or even Mexico or Brazil. Also, more disruptive technologies such as crowdfunding platforms, cryptocurrencies and crypto assets have been met with more opposition from the Government. Thus, the country still has an opportunity to improve.
After reviewing the main patterns and current trends in LatAm’s fintech landscape, we can now move on to the main point — is nearshore fintech software development in Latin America a good idea?
As an entrepreneur, you understand the unique challenges of developing fintech software, from managing financial data, integrating with banking and payment systems to navigating complex regulatory environments.
How then can nearshore fintech software development in Latin America help US fintech companies overcome these challenges and drive financial innovation?
With the challenges associated with implementing fintech solutions, successful teams are adopting long-term strategic planning and an innovation mindset to navigate this evolving landscape.
To make this happen, there are general attributes that are common to the people who successfully build high-quality, secure, and compliant fintech applications. Nearshore fintech software development teams working in this space should possess a diverse skill set, including a deep understanding of:
Your nearshore software development team must be well-versed in a wide range of financial regulations, including but not limited to:
Your nearshore fintech software development team should be skilled in assessing credit risk. They should understand how to use statistical models and machine learning to predict a borrower’s likelihood of default. They should also know how to score borrowers based on their risk profile and implement systems to detect and prevent fraud.
Your nearshore team should be experts in payment processing. They should be able to integrate with different payment gateways, secure sensitive payment information using tokenization, and efficiently handle chargebacks to minimize losses.
Your nearshore team should be cybersecurity experts, implementing strong security measures like firewalls and encryption. They should also use advanced technologies like AI and machine learning to detect and stop fraud.
With a large tech talent pool of over 2,000,000 active developers as of 2024, Latin America possesses a solid base of skilled talent in ICT and financial services, allowing fintech companies to achieve a notable level of maturity. Latin American Fintech developers are skilled in the widely used programming languages and technologies, including JavaScript, Python, C#, Java, Kotlin, SQL, React.js, and Angular.
Another competitive advantage of nearshore Fintech development in Latin America is the relatively low labor costs for hiring professional software developers. Just consider the average salary in Mexico for a nearshore software developer, which is two or sometimes three times lower than in the United States. No wonder why American employers are actively nearshoring software development projects to Latin America dev teams.
Finally, US tech companies choose Latin America as a nearshoring hub for fintech services due to its proximity and cultural similarities. Real-time communication is seamless, with shared time zones. As a bonus, the similarity in corporate culture and work ethics—expressed in dedication, punctuality, and a willingness to go the extra mile to meet deadlines—enhances workflow productivity. Most LatAm developers are resourceful problem-solvers and employ a direct, assertive communication style, which minimizes misunderstandings typically found with offshore teams.
Certain risks exist in the Latin American fintech sector that may deter those who want to enter this relatively young but dynamic market:
Tech companies might face challenges with local tax regulations in the process of software nearshoring in LatAm, such as bureaucracy in payroll management. Employers in most Latin American countries are required to do numerous calculations and payments, such as personal income tax withholding, occupational risks, sickness, maternity, disability, retirement, social benefits, and state payroll tax. Some of them are deducted from the employee’s salary but must be calculated and withheld by the employer, while other payments are solely the employer’s responsibility.
Choosing the right staffing agency to help you expand your business to Latin America can be a game changer. Next Idea Tech’s staff augmentation services enables small businesses to hire Latin American developers quickly, pay them in the local currency, and offer local benefits. It’s hard to know where to start and what to put in place abroad to protect your business and your employees. At Next Idea Tech, we have legal teams on location in LatAm and entities set up to ensure that your payroll is protected and that you remain compliant abroad.
From access to top nearshore fintech developers in Latin America to streamlined international hiring processes, the advantages of working with a staff augmentation agency (and using Next Idea Tech) are undeniable.
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