Argentina’s central bank has approved payments app Ualá’s acquisition of digital bank Wilobank, clearing the way for the company to broaden its reach in the Latin American financial services world.
As Reuters reported Friday (June 10), the deal — in the works since last year — gives Wilobank owner Eduardo Eurnekian a stake in Ualá, which provides payment services for people without a fixed income or without access to the traditional banking system.
See also: Report: Mobile Payments App Ualá To Acquire Digital Bank Wilobank
“It’s a big milestone, something that fills us with pride. We became the first fintech to acquire a banking license,” Ualá CEO Pierpaolo Barbieri said in an interview with Reuters, referring to a license within Argentina.
Launched in October 2017, Ualá offers a Mastercard-branded prepaid card and app and allows customers to conduct a number of financial services, such as sending and receiving money, online shopping and ATM withdrawals.
The Wilobank deal will let Ualá carry out operations otherwise reserved for banking entities, like the payment of salaries and pensions, Barbieri said.
Valued above $2 billion, Ualá has more than five million clients in Latin America. Last year, the company launched Ualintec Capital, its broker-dealer operation in a bid to expand the number of investment alternatives it can offer customers through its digital wallet app.
More recently, Barieri announced he was launching a venture capital (VC) operation, 17Sigma that will focus on early-stage Latin American startups. He has said the company will focus on pre-seed and seed rounds in Latin America, as there’s less interest in that phase of funding from larger global funds.
Read more: Founder of Argentina’s Ualá Launches VC Fund
Serving the underbanked is a particular challenge in Latin America, where large swaths of the population lacks access to financial services. Dealing with this problem also requires promoting financial education, Paula Arregui, chief operating officer for Mercado Pago, said in an interview with PYMNTS last year.
“In some countries in the region, the use of digital payments is sometimes discouraged directly from shops due to high taxes or the high informality in the economy — also a direct consequence of a poor financial education — that contributes to many people only using cash,” Arregui said.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More