Uruguay arises as a regional fintech hub

Tax benefits, technological talent, and its tradition as a financial services provider explain the success of fintechs in Uruguay.
Publication date: 07/09/2023

The stability offered by Uruguay, which facilitates the development of business projects and the enthusiasm of international markets to acquire innovative financial solutions, consolidates the country as a regional hub for the fintech sector.

Uruguay has a long tradition as a financial services provider, harmoniously coordinated with the proliferation of local and international technology companies dedicated to developing innovative solutions for the sector.

This ecosystem is developing based on the country’s good reputation as a regional financial center, the outstanding qualification of human resources in the ICT and financial sectors, and a coordinated institutional system supporting this type of enterprise development. It is further leveraged by a specific fintech chamber that brings together companies in the industry and promotes innovation, the creation of new companies, and the development of existing ones.

“Uruguay offers human talent, made up of a combination of idiosyncrasy with educational background and a high level of commitment to work. When it comes to doing business, Uruguayans are reliable and transparent,” says the president of the Uruguayan Fintech Chamber, Rodrigo Tumaián.

The most attractive thing about Uruguay for companies developing their businesses, explains Tumaian, is its software law with tax benefits. “It is a huge incentive to develop businesses and hire people in Uruguay,” he expands.

In addition to tax benefits, the Uruguayan fintech ecosystem stands out for its flexibility in business development and service growth. “Uruguay has excellent bandwidth, 5G, and good connectivity, all aspects that are not minor,” Tumaián adds.

The country continues to progress in regulation. In September 2022, the “multi-acquiring” process was completed, enabling merchants to have a single contract with all debit, credit, and e-money cards. “Multi-acquiring improves the system’s competitive conditions, ending existing monopolies and laying the foundations for the existence of several acquiring service providers (...) From the merchants’ perspective, it also generates notorious efficiency gains, as they will interact with a single actor and not with multiple acquirers, simplifying electronic payment management,” reports the Uruguayan Ministry of Economy and Finance.

Uruguay consolidates an ecosystem of fintech companies

The Uruguayan Fintech Chamber brings together 40 companies specialized in developing technological solutions for financial institutions with payment platforms, open banking, crypto, blockchain, and more.

Uruguay is an attractive platform in the region for companies that want to project their business in foreign markets, Tumaián explained. Indeed, almost all the companies working from the country serve international markets.

Some successful examples that are being developed in the country are Bankingly, a platform that allows financial institutions to offer online and mobile banking services, and Paganza, another Uruguayan company acquired by Banco Santander, which is a mobile application that enables users to make financial transactions and manage their invoices with different functionalities.

Regarding foreign investment, Argentina’s Ripio, a pioneer in the cryptocurrency sector in Latin America, chose to set up offices in Uruguay at the beginning of 2022. “Uruguay has certain competitive advantages and could be a crypto hub (...) the fact that there are free zones makes it a pole for creating crypto companies working from Uruguay.”

Uruguay also has a place for innovation. This is the case of Prometeo, the Uruguayan startup co-founded by Tumaián dedicated to open banking, payment initiation, and data access, which is a pioneer in the account-to-account digital payment service in Latin America. This service allows merchants to cut out intermediaries and lower their costs.

On September 14, Uruguay will host the Fintech South Hub event for the first time, which will bring together regional leaders to share the latest trends in the sector.