Prex's mobile wallet to land in Chile and Paraguay

Uruguayan fintech Prex plans to reach 5mn users of its virtual wallet in Latin America in the next two years by strengthening operations in Argentina, Peru and Uruguay, as well as launching in Chile and Paraguay.

The company currently has 2.2mn users in the three countries where it operates.

The focus is on growing organically, although inorganic operations are not ruled out.

“In this last year we already have a mature market in Uruguay, being leaders, and we’re positioning ourselves in Argentina with very good traction of our paid account product, which was a great trigger for us,” Agustín Gallo, head of regional growth for Prex, told BNamericas. “In Peru we’ve been growing and improving the value proposition.”

The company first launched its virtual wallet in Uruguay and has operated in Argentina since 2019. In 2021 it launched in Peru and the launch in Chile is planned for the end of this year. Next year the expectation is to launch in Paraguay.

“In Chile the base of the population is banked but does not have a range of financial products. That is where we see the opportunity for Prex to be a comprehensive platform where you can solve your entire financial affairs,” Gallo said.

In the case of Paraguay, which has low banking penetration, Gallo says Prex’s entry into the market may be more comparable to Peru, where acceptance of virtual wallets is growing. “If we compare the first two years of operations in Peru with the first two in Argentina and Uruguay, what we see is that Peru's ratios are much more encouraging than Argentina’s and Uruguay’s were.”

“Nowadays there are beginning to be competitors [in Paraguay] but there is no clear leadership like in Argentina, which is much more competitive and there is a clear leader,” he said, referring to Mercado Libre's wallet, Mercado Pago.

Prex also offers dual currency accounts, currency exchange, prepaid Mastercard cards and microconsumer loans, among others.

CONSOLIDATION

Last year Brazilian bank Itaú acquired 30% of Prex for an undisclosed sum. In turn, Prex bought Itaú's virtual wallet in Argentina, Ank, and also acquired the firm Tap.

“We see opportunities in direct competitors but also in partners that can complement our value proposition. We’re not actively looking but we’re seeing different things to do,” added Gallo.

He believes that greater consolidation is still necessary in the Latin American market. “In Argentina there were a number of companies offering the same thing,” Gallo said about a market that began the consolidation wave.

However, trend is not exclusive to Argentina and in the case of Chile and Peru, for example, Falabella discontinued its fintech company.

Gallo expects even more consolidation in the sector, even among banks and fintechs. "I think there is a little more need for consolidation and purification of some fintech companies that have not yet found a sustainable model," he said.