Galileo builds up LatAm footprint amid growing fintech competition

US payment and financial technology solutions group Galileo is expanding its Latin American presence, upbeat about digitization opportunities despite increasing competition in major markets.

“What makes Latin America extremely interesting is that every country is in a bit of a different place when it comes to financial services digitization,” Tory Jackson, Galileo’s regional head of business development and strategy, told BNamericas.

Founded in 2000 in Utah, the company is a major MasterCard partner and began operating in Latin America offering payment processing services in Mexico, which remains host to the headquarters of its regional operations. Now the company is gradually "heading south," adding other services, clients, partners and companies to its regional footprint.

Market openness is closely tied to this movement, he said.

“Latin America, in general, has been somewhat closed off to a certain extent. And maybe in some cases even a bit monopolized. The advancement of technology APIs that allow for companies to collaborate more closely and collaborate across borders is an opportunity. Brazil has done a tremendous job from a payments perspective,” said the executive.

Part of its gradual expansion process, Galileo acquired Argentina’s Technisys last year to reinforce a technology platform supporting payment card issuing, mobile push provisioning and other financial products.

Technisys integration is just coming to a close. Jackson rules out any new acquisition for now and plans are to build up presence on top of the existing network.

COMPETITIVE LANDSCAPE

The payments and financial services market in Latin America is undergoing a major transformation.

It has been attracting an increasing number of companies and investors amid the opportunities that still exist for digitization in several markets, coupled with the gradual opening of this segment by different banking regulators.

Operating in different niches, processing brands such as Uruguay’s Prometeo or Brazilian companies Cielo, Rede and Getnet have stood out in the market.

The fintech sector is by far the most active regarding startups, being the one that has attracted most equity and venture capital investment in Latin America.

Last year, in one of its largest transactions of the kind, Visa announced the purchase of Brazilian fintech Pismo, a cloud platform provider for cards and banking services, for US$1 billion.

Similarly, Visa announced in December a majority interest investment in Mexico’s Prosa.

Meanwhile, MasterCard's other processing partners in the region, in addition to Galileo, include Banco Dondé, Dock, Evertec, Pomelo and Swap.

Jackson downplays competition, citing collaboration in the ecosystem as a benefit.

“I think this movement is ultimately good. What has been lacking in Latin America is precisely competition and collaboration, and these are things that really accelerate the market.”

Galileo claims to manage 151 million accounts in 16 countries. In Latin America, it is certified as local processor in Mexico, Colombia, Chile, Peru, Argentina, Uruguay and Brazil, a footprint largely created by Technisys.

“This makes us the issuer processor with the most countries listed by MasterCard in Latin America,” claims Jackson.

The executive did not disclose projected capex or operational targets for the region.