The online payments platform is seeking permission to be a cross-border acquirer from Chilean regulator, the Financial Market Commission.
Flow is a Chilean Payment Service Provider (PSP) with more than 10 years in the electronic transactions market, which this week announced its efforts to become a sub-acquirer before the Chilean regulator, the Financial Market Commission or CMF, in what is known as a Declaration of Intent.
According to the firm, this will allow them to access new business opportunities, establish collaboration with powerful strategic partners , other market players and regulatory bodies, as well as continue to strengthen their value proposition.
“This Declaration of Intent is of great importance, as the regulation represents an opportunity to strengthen the trust of merchants and consumers in our payment platform, by demonstrating our capacity and commitment to comply with the technical and regulatory requirements imposed by the regulator,” said Juan Gregorio Pasten, CEO of Flow.
The executive said that this announcement also implies for customers a higher level of security and reliability in transactions carried out through Flow.
“They can expect even more rigorous compliance with regulatory standards, which seek to protect and strengthen their rights as consumers,” he said.
Flow will take advantage of this situation to implement new functionalities and services for the benefit of its clients, which will be aligned with the most demanding new regulatory standards, ensuring the security of the ecosystem.
Although the CMF still needs to issue a general rule that will provide a specific regulatory framework for the figure of sub-acquiring operators and cross-border acquiring, it is generally understood that it would not be very different from what already exists regarding an Acquirer.
After this, the second stage will take place, where Flow must obtain authorization to exist from the CMF and be registered in the registry of payment card operators.
“This process will include a thorough audit of our technical systems and security protocols, so it will be a great opportunity to validate the strength that has always characterized Flow, as well as to contribute to the implementation of continuous improvements,” Pasten said.
Juan Gregorio Pasten indicated that “complying with regulatory parameters may imply changes in Flow’s technological and operational systems, as well as in the organizational and administrative structure, requiring robust and efficient risk management and control policies. In addition, there is the obligation to report and deliver information to the authority, which represents an interesting challenge for us.”
Regarding the direct impact that this new regulation will have on the business model, he said that “we are sure that it will improve the value proposition, will have a positive impact on the way we relate to our clients and strategic partners, and will drive us to implement new security technologies, service segregation strategies, the adoption of higher compliance practices necessary to align with the new regulatory requirements, as well as the establishment of clear and transparent conditions.”
In the long term, Flow hopes to strengthen its market position, gain the trust of a larger number of customers and partners, and access new growth opportunities both in Chile and in other Latin American markets. Aligning with regulation will also allow it to be more competitive and better prepared to respond to changes in the regulatory and market environment.
Juan Gregorio Pasten also noted that "we see regulation as an ally in Flow's expansion projects in the Chilean market by providing it with a clear operating framework that is recognized by financial institutions and consumers, and therefore, a powerful antecedent for expanding into markets in the region, where high standards of regulation and security in payment operations are valued."
Flow currently has operations in Peru and Mexico, while it is analyzing other markets with potential to expand and add value.
In this way, "the regulation comes at a very good time, accompanied also by the recognition of the cross-border sub-acquisition activity, better known as Crossborder, whose market is extremely powerful at the Latam level.
