Prometeo is shaping the development of Latin America’s financial infrastructure through the adoption of open banking and A2A payments
Latin America’s financial infrastructure is undergoing significant changes due to digitisation, the emergence of new fintech companies, regulatory changes and a focus on financial inclusion. These changes are transforming the financial market in the region, opening up new opportunities for people and businesses that were previously excluded from the traditional banking system.
The lack of financial infrastructure was identified by the founders of Prometeo four years ago. Prometeo is now the largest open banking platform in Latin America, and the founders analysed the relationship that users, i.e. small, medium, and large enterprises, had between their money, the financial services, and products available in the market. They realised that due to the lack of standardisation or digitisation of most of the daily administrative processes that companies carry out when moving or transferring money, making payments and managing different bank accounts was not a smooth process.
How does open banking foster better financial infrastructure in Latin America?
Open banking is both a trend and a right that allows sharing financial data – such as transaction history and balances – and initiating payments from bank accounts with authorised third parties, such as fintech companies and other banks. Prometeo’s open banking platform enables banks and financial institutions to share this data securely. Its products, characterised by innovation and advanced automation, have grown and evolved in response to the strong demand for new and better digital products that the pandemic has forced users to adopt.
In today’s world, data is a powerful asset, and the ability to access it is even more important as it allows you to understand your customers’ financial situation.
Also, the possibility of accessing this data is even more important as it allows other companies and organisations to understand customers’ financial behaviour, automatise treasury management processes and access banking information in just a few minutes. Prometeo’s “data APIs” allow companies and businesses to get standard, historic and real-time information of their different banking products such as bank accounts.
Moreover, their account validation product was developed in response to the need of banks and companies to validate bank account information with those accounts they need to interoperate with. Verifying account numbers and the holder information prevents costs overrunning due to transactions made to the wrong accounts, as well as fraud.
Recently Prometeo launched its Account to Account (A2A) Payment API, an innovative product where money is transferred directly from the user’s bank account to the merchant’s account; the payment is made seamlessly without leaving the merchant’s app or website. A2A has positioned itself as the mainstream method of payment among users in the UK, the Netherlands and Germany, as it solves the problems associated with traditional payment methods.
Historically, payment methods through credit and debit cards have dominated the market despite the high fees, lack of market coverage, not to mention slow and complicated payment conciliation processes for merchants. A2A Payments allows merchants to receive their payments without intermediaries, in real-time and with lower costs than debit or credit cards.
From a financial infrastructure perspective and its development in Latin America – although a portion of the payments processed in the region run through debit and credit card channels – there is another large part of the payments that does not have the infrastructure to be digital. And therefore, new options such as A2A have had high adoption rates, especially among merchants that need to receive their money in real time.
The expectation for the next 12 months is to see Prometeo’s A2A Payment solution included at the top e-commerce checkouts. After all, it is the most cost effective and innovative solution to hit the market in a long time.