Source: Ria Golovakova, Dapi
Dapi is officially launching with Mexico. This is our second market launch outside of MENA and the first in Latin America.
Mexico is a natural starting point in expanding our presence in the region. With a GDP of $1.2 trillion, it is the second-largest market in Latin America. 39.5% of Mexico’s 129.9 million residents use smartphones and could thus access mobile payments. The country has a robust startup ecosystem, with 25.6% of Latin America’s fintech companies.
Yet currently, this market is severely underserved. Most vendors in the country simply refuse to accept cashless payments, because they don’t want to pay high card fees. Card payments are very expensive for merchants around the world, who have to pay a processing fee, a card scheme fee, and an interchange fee. These fees benefit payment processing companies, card networks, and banks respectively, but for the merchant, they only mean significantly reduced margins. In Latin America, where margins for vendors are already paper-thin, choosing between cash and card could mean the difference between staying in or going out of business.
The main digital payment system is actually a hybrid scheme that allows customers to generate a barcode for an online purchase, which they can then pay for wish cash in a physical store or through their online bank app. While an improvement, the system is still cumbersome, often requiring customers to physically leave their homes to make an online purchase. As for merchants, while accepting payments through this scheme is cheaper, they need to wait 1-2 days for confirmation of purchase, which can delay the settlement of their products.
Dapi’s mission to provide easier and more accessible financial services matches perfectly with the region’s needs. Previously, the only financial services offered by fintech companies were data or built on card payments. No company was looking to make life easier for the merchants that simply wanted to focus on doing business.
Dapi’s payments, on the other hand, can be done from anywhere and provide instant payment and confirmation. Our technology works by automating bank account transfers. This way, companies can receive bank payments and get instant confirmation of the funds, as easy as card payments but without the fees. This development is going to be revolutionary in Mexico, especially as Dapi is going to support more than the top 10 local banks, which covers over 80% of the market.
The scale of this influence on the payments landscape is clear through client interest. Dapi’s solution seems to be perfect for the merchants that are currently struggling with the expenses of traditional payment methods, delays, confirmation issues, and other errors.
Dapi hopes that by increasing the accessibility of financial technology, it can help develop the fintech ecosystem in Latin America. To further advance this goal, we are offering financial data for free. We’ve realized that most companies use financial data to facilitate payments, so we are not going to have any extra charges for merchants that simply want to receive money.
Our team members have been tirelessly working on the ground in Mexico for months to ensure that this launch would be successful. Our Latin America Expansion lead, Diego Gonzalez Arciniega, believes that Dapi will make a big difference in the region. “Banks have been overcharging for years and years,” he says. “The financial system in Latin America can be vastly improved simply by bringing in different types of innovation and building the relevant infrastructure.”
Our CEO, Ahmed Mohammed, is confident in Dapi’s ability to dominate the market. He says: “it will be additional proof for our ability to execute and leverage our diverse team members’ backgrounds. The Latin American market is very promising and I think we will be one of the pioneers of payments in the region”.