In 2021, Latin America and the Caribbean (LAC) received $127.6 billion in remittances, constituting an annual growth of 26% the highest registered in the past two decades, according to the Inter-American Development Bank.
Most regions around the world are experiencing strong growth in remittances overall. The World Bank estimates showed remittance flows in 2021 increasing by 21.6% in Latin America and the Caribbean, 9.7% in the Middle East and North Africa, 8% in South Asia, 6.2% in sub-Saharan Africa and 5.3% in Europe and Central Asia.
The remittances sector is expected to grow further thanks to stronger economy following the COVID-19 pandemic, together with migrants determination to support their families in times of need, especially Latinos that saw a strong depreciation of their home-country currencies.
Players like Inter&Co INTR , Remitly Global Inc. RELY , PayPal Holdings Inc. PYPL and Euronet Worldwide Inc. EEFT subsidiary Ria Money Transfer are all expected to lead this growth. An Acquisition That Could Change The Industry?
With USEND already an important player in the industry among immigrants, Inter&Cos acquisition could change the remittance market. Over the years, the American fintech carved a niche for itself as a digital money-transfer platform that lets users, mainly Brazilians, send money abroad securely and quickly through the app.
The USEND acquisition marked Inter&Cos entry step into the U.S. market, and will allow it to create a robust global platform offering cheaper, fairer, and more efficient products and services. As a Super App it will start by serving the Latin immigrant market, which is underserved in terms of banking and comprised of nearly 40 million people.
The former app recently rebranded to Inter Global to ramp up the digital banks presence in the US market. Inter Global currently serves a growing client base of more than 150,000 customers across 40 states in the U.S. alone, offering transfers originating in the United States, Brazil and Canada to more than 60 destinations.
The companys footprint seems to resonate with Inter&Cos leading Brazilian Super App, which offers financial and non-financial services to more than 22 million customers.
Inter&Co offers a complete suite of services in banking, investments, credit and insurance, in addition to a virtual mall that brings together the best retailers in Brazil and the U.S. The companys US digital account allows individuals and companies to make transfers in U.S. dollars quickly, safely and 100% online, as well as process payments from several international platforms in Brazil, including Pix, the instant payment platform developed by the Brazilian Central Bank.
With this acquisition and rebranding, Inter&Co hopes to accelerate and strengthen its position as a new player among U.S. fintech companies. The plans include the rollout of its Super App capabilities and products to U.S. clients, including debit cards, gift cards with cashback, and ACH/Wire transfers to any account in the US, serving as a hub for the needs its customers have in a world without borders.
The integration of the two companies will result in a platform that offers both financial and non-financial products to immigrant clients living abroad, Brazilian clients wanting to access international products, and the U.S. population, in general, seeking to gain the benefits from a Super App, said Inter&Co CEO Joo Vitor Menin.
For consumers, Inter&Co and its remittance business Inter Global are regulated financial institutions in their countries of origin, offering superior governance and end-to-end security to all transactions.
Our digital account will allow our clients to buy air tickets, transfer U.S. dollars to the international account and pay expenses on the trip, all in a single app. And these are just the first steps. Our planning includes an international account for U.S. residents scheduled to be launched soon, Mr. Menin concluded.
Inter&Co has a broad credit portfolio of BRL$19.5 billion, shareholders equity of BRL$7.1 billion, and BRL$40.9 billion in total assets.
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Featured photo by Inter&Co