Focusing on creating the infrastructure and management of white label financial services, Brazil‘s Hub Fintech is not the most popular business from its parent company Sforza – which also owns the local operations of fast-food chains KFC and Pizza Hut – but is certainly the one that has been growing stronger.
Providing resources for players like big retailer Magazine Luiza and Colombian super app Rappi manage to operate their own financial products, Hub Fintech business model has been benefiting from a rising trend: everyone wants a piece of the fintech sector. Offering the support of these financial services for both fintechs – that in many cases prefer to focus their efforts on acquiring users – and companies from different sectors, like retailers, that are increasingly aware of financial services’ potential – Hub Fintech plans to double the operation in 2020, according to CEO Alexandre Brito. “Our expectation is to reach BRL12 billion in TPV and 6 million active accounts,” he revealed to Brazilian media outlet NeoFeed.
“In both cases, having a partner who already has all the technological and regulatory background cuts time and speeds up the delivery of products,” Bruno Diniz, founder of specialized consultancy firm Spiralem explained to the media outlet. “This created a separate market. Quiet, but with giant potential. In the war of fintechs or digital banks, whoever sells the weapon is always winning.”
Backed by new fundraising, expansion to other markets is also on the horizon. In the months to come, HubFintech will start operating in Colombia, Chile, and Peru – and as soon as these new operations are set – Argentina will be the next market. “These are markets where we see a mix of favorable regulatory environments, healthy economies and the demand of our customers who already operate in these countries”, said the executive. To speed up the entry into these new markets, the plan is to invest in acquisitions.
From the manufacture, printing, and personalization of cards to the processing and authorization of transactions, Hub Fintech’s operation also includes customer service and all the infrastructure and management that support services such as digital accounts, loans, benefits, and anti-fraud analysis. With the new investment, the company also plans to expand the product portfolio, such as the launch of a service that allows cardholders to make withdrawals directly from partner retailers.
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