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Contxto – Santiago-based fintech, Global66, raised US$3.25 million in January. The round saw the participation of British venture capital (VC) firm Venrex, as well as Genesis Management and angel investor, William Armitage.
Sources report that the startup will use these funds to strengthen its hold in its home country of Chile.
In addition, growth plans are in the works as the fintech looks towards Colombia, Mexico, Argentina, and Peru. In this latter country, it already opened offices in July of last year.
Fintech favors transparency in remittances
Global66 is a startup that manages international transfers and channeling remittances. Like others of this nature, through the fintech’s website or app, a person located in Colombia, for example, can send money over to her family in Chile through the platform.
In the process, third-parties, who usually take a cut of the amount that’s wired, are left out of the equation. Meanwhile, the startup charges a fee ranging between one and 2 percent for its services.
According to Tomás Bercovich, the startup’s Founder, traditional participants in remittances usually charge somewhere between 7 and 8 percent. They also avoid mentioning that because of this fee, the actual amount that will be deposited into the receiving account is less than what the sender originally estimated.
Consequently, the fintech’s platform also shows the user the exact amount her family will receive after Global66 charges its fee. Thus offering more transparency.
The system can reportedly complete transactions within an hour or a day depending on the location of the recipient’s account.
Remittances and technology
I love that there’s no industry technology isn’t transforming. And certainly, Latam’s fintechs are poised to continue playing a big role in migration and remittances.
This was the case of Global66’s platform. There’s also Mexican Bitso that’s managing remittances with cryptocurrencies. These trends, mixed with Latam’s fondness for digital assets, suggests that blockchain-based remittance services also hold a future in the region.
But as usual, as these tech innovations rise, regulations and tighter controls to avoid terrorist financing and money laundering within these specialized niches will also rise.
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