Argentina's Uala expands to Mexico as pandemic fuels need for digital payments

Argentine digital banking startup Uala is expanding operations to Mexico, the company said on Tuesday, as the global pandemic fuels a boom in demand for cashless payment options. The announcement by the personal finance app, backed by early investors George Soros and Point72 Ventures LLC, comes after founder Pierpaolo Barbieri said last year the company planned to double in size after millions in new investments led by Tencent Holdings and SoftBank Group Corp, the Japanese technology investment giant.

Argentine digital banking startup Uala is expanding operations to Mexico, the company said on Tuesday, as the global pandemic fuels a boom in demand for cashless payment options.

The announcement by the personal finance app, backed by early investors George Soros and Point72 Ventures LLC, comes after founder Pierpaolo Barbieri said last year the company planned to double in size after millions in new investments led by Tencent Holdings and SoftBank Group Corp, the Japanese technology investment giant. Uala will offer in Mexico a Mastercard card for physical and online purchases, cash withdrawals from ATMs, and the sending and receiving of payments, the company said.

The company is pushing to convert people who prefer cash to digital payments, noting in a statement that less than half of Mexico's population have bank accounts. It will allow cash deposits at 14,000 locations across Mexico including supermarkets, pharmacies and convenience stores. "We have to convince all these Mexicans who have always depended on cash to transform their activity," Barbieri told an online news conference.

In Argentina, the company has issued more than 2 million prepaid debit cards. "We are confident in the potential of Uala to revolutionize financial services in Mexico as they are doing in Argentina," Marcelo Claure, chief executive of SoftBank, said in a statement.

Uala's expansion to Mexico comes as e-commerce and digital payment companies saw an uptick in usage as more people were forced to shop online and use cashless payment options under strict lockdowns due to the coronavirus. Just 54% of adults in Latin America and the Caribbean have a bank account, though that represents a steady increase of 15 percentage points, or nearly 90 million, since 2011, according to World Bank data.