How fintechs are transforming the payment experience in Latin America

In the financial industry, where technology and technical resources are scarce, API infrastructure providers become key partners that accompany fintechs in achieving their business goals. The role of these providers is essential to accompany the rapid growth experienced by fintech and banks, in an environment that is increasingly competitive.

One of the challenges facing fintechs in the region is the lack of a recurring payment experience truly designed for the digital world. The underlying problem lies in the infrastructure available to support these transactions. Fintechs are growing at a faster rate than the service providers that support them, which has led to the rise of startups like tapi, which provide a robust and high-performance regional payments infrastructure.

Comparing the traditional local providers with the possibilities offered by the new generation platforms, the differences are evident. With tapi, for example, it is possible to reach a uptime unique in the market. This is achieved thanks to the development of its own core based on a core of automatic retries that makes service payments happen asynchronously, avoiding duplicate payments. The response time is only 200 ms, and it has multiple connections with the main service providers in each country.

In contrast, traditional local carriers often generate stability stutters, have longer response times (around 1500ms) and only offer one connection per service provider.

In terms of functionalities, a regional integrator of this generation in the service payments vertical can offer a wide range of options, such as debt inquiry and payment, asynchronism, expiration schedule, multiple payments, automatic debit, photo payment and even a service recommender. On the other hand, local or traditional operators only offer basic functionalities, such as debt consultation and payment. It is clear that fintech companies can obtain greater value by working with integration platforms.

Integration is also a crucial factor to consider. With new players offering state-of-the-art infrastructure, the integration process can take anywhere from 3-5 weeks, and there have even been cases where clients were able to complete it in as little as 6 business days. In contrast, traditional local integrators often require more than three months and even as long as five or six months to complete the integration process. Also, the most advanced integrator platforms offer a dedicated integration team, while local integrators often lack proper support and clear documentation.

The new platforms also provide modules with automated development, custom testing, and detailed and stable test environments. On the other hand, approval processes with traditional local integrators often mean tedious approval processes and lack stable test environments to support development.

Another relevant aspect is regionalization. Working with integrators such as tapi allows a configuration time in each country of less than two months. This means that fintechs can expand rapidly and offer their services in multiple countries in Latin America. In contrast, by working with traditional local integrators, fintechs are limited to a local presence with no clear expansion plans, which means long lead times to add new connections and expand their reach.

According to a McKinsey report, fintechs can save up to 60% in operating costs by using API platforms compared to building infrastructure in-house. Another work by the same consultancy estimates that process automation can generate cost savings of between 20% and 35% and a reduction in process cycle time of up to 50%.

For its part, a Deloitte study revealed that fintechs that integrate with API provider platforms can reduce the time to launch new products and services by 50% or more, giving them a significant competitive advantage.

Fintechs use APIs to access a wide range of specialized services, such as payments, identity verification and credit scoring, among others. This allows them to improve their offer for customers. API platforms offer a scalable infrastructure that facilitates growth and adaptability, in addition to having advanced security measures against fraud and cyberattacks. It also allows you to manage demand peaks and add new features without service interruptions.

The market numbers in the Latin American region prove the need to advance in these innovations: the total volume of payment for services is 300 billion dollars and payment operations for subscriptions are for more than 550 million. In addition, 60% of these payments continue to be made in cash, so there is a large number of service payers not yet captured by the digital payment sector.

In this context, meeting the growing demands of fintech implies that we achieve, among other challenges, agile approvals, where there are no bureaucratic processes but only a series of meetings to ensure that the integration meets the expectations of both parties. It is also important to have constant support in the deployment process, with progressive roll-out and identification and resolution of ad-hoc problems.

tapi, as a startup within the fintech universe, is positioned as a reliable and efficient partner to accompany all companies in Latin America in improving the payment experience for their users.

With a focus on the development of high-performance API infrastructures, we are a strategic ally for fintechs in their search for excellence and cost savings.

CBO and Co Founder of tapi