During the first six months of the year, the total sum of international shipments transacted from Latin America through the fintech Global66 amounted to US$ 417 million, marking an increase of 62% compared to the previous year.
Chilean fintech Global66, which specializes in money transfers between people and companies, released this Tuesday a preview of its study "Remittances in Focus: Trends and Perspectives in Colombia, Chile, and Peru - First Semester 2024."
Focusing on Colombia, the company highlighted data provided by the Banco de la República, which indicates that remittances reached a historic record totaling US$ 5,627 million, an annual increase of 15.4% compared to the previous year, which was US$ 4,873 million, being the highest figure recorded in the last four years for this period.
In 2020, Colombia received US$3,117 million, followed by US$4,116 million in 2021 and US$4,463 million in 2022.
Globally, during the first six months of 2024, the total sum of personal remittances transacted from Latin America through its platform amounted to US$ 417 million, marking an increase of 62% compared to the previous year, placing Colombia, the United States and Spain as the destinations where the fintech 's users send the most money.
This reflects an increase in global interconnection and strong confidence in digital financial solutions.
Remittances to Latin America and the Caribbean reached US$156 billion in 2023, and are growing supported by the strength of the labor market in the United States, according to a World Bank report issued in June of this year.
In that report, Mexico remains the largest recipient in the region – and second in the world after India – with US$66.2 billion, followed by Guatemala with US$20 billion, the Dominican Republic with US$10.6 billion, Colombia with US$10.1 billion, Honduras with US$9 billion and El Salvador with US$8.2 billion.
Regional growth varied widely in percentage terms, from a 44.5% increase in Nicaragua to a 13.4% decrease in Argentina, and remittance flows to the region are expected to increase by 2.7% in 2024.
The World Bank report also found that the cost of sending US$200 to the region was 5.9% on average, practically the same value as the previous year.
COLOMBIAN MARKET
“Colombia is a very important market for Global66,” said the founder of the fintech , Tomás Bercovich, to AméricaEconomía at the end of August, during a financing event in the Chilean capital.
On that very date, the fintech traveled to participate in Colombia TechWeek and other technology events on Colombian soil.
Focusing on the case of Colombia, the report shows that the volume of personal remittances managed by Global66 grew by 184% in the first half of 2024, compared to the same period of the previous year.
The figure shows US$ 54 million this year versus US$ 19 million on the same date in 2023.
The main destinations for these remittances were the United States, Spain and Mexico, reflecting the mobility of Colombians in these countries, where aid to relatives, studies and savings and investment abroad are the main reasons.
“The first half of this year was marked by two key factors that significantly boosted Global66’s volume growth. First, we saw a notable increase in international transfers to the United States and Spain, underlining the growing importance of remittances on these routes and the strong connection of Colombian communities abroad with their beneficiaries in the country,” said Santiago Mejía, Country Manager of Global66 in Colombia , in a statement released by the fintech company on Tuesday.
“Secondly, the fluctuation of the Colombian peso during the second quarter of 2024 led many people to protect themselves from exchange rate volatility by acquiring and holding US dollars. This behavior reflects the preference of savers and investors for the dollar as a safe haven in times of economic uncertainty,” Mejía added.
As for international business transactions from the platform, there has been a 114% increase in the first half of the year, rising from US$7 million in 2023 to US$15 million in the first six months of the year, for Colombia.
Indeed, the study determined that the main destinations included the United States, Chile and Mexico, where the main reasons for the transactions were payments for digital services, international collaborations and payments to freelancers .
ACCELERATED GROWTH
For Global66, the increases seen highlight the growing globalisation and reliance on digital platforms to facilitate fast and secure transactions, and underscore the importance of digitalisation for companies looking to expand globally.
“Global 66 is growing around 90% year on year and we intend to keep up with that pace or accelerate it next year,” Bercovich told AméricaEconomía in August.
Highlighting its 2023 moves, the founder highlighted that during August the fintech launched a service for its clients, both individuals and companies, that provides them with an account number in the United States, Europe and the United Kingdom so they can pay or collect as a local.
“It's as if you were in the United States or Europe and you had a local account, but you open it from Global66 in a couple of clicks. It's that simple. It's a product that is a total game changer , because you don't just have your account in your country of origin, but you have an account in practically the whole world,” Bercovich highlighted on the occasion.
The Chilean emphasized that this success is based on an improvement in the experience of cross-border transfers.
"We have been concerned with shortening, breaking down barriers, making things easier, cheaper, more transparent. The financial industry in general is full of vices, hidden costs, and commissions that are charged here and there," he stressed.
Another milestone in the fintech was the enabling a year and a half ago of instant transactions on its platform for companies, called Global Business.
“It also allows companies to manage their entire local and global financial life in a very easy way. They can now transfer freelancers without having to send them a Swift [code] from Europe to here with all the cost and time that this entails, or pay for services like those of Google, Facebook, Amazon, all over the world,” said Bercovich.
Just as if they had subsidiaries in different parts of Latin America, companies can also transfer money instantly between one subsidiary and another with Global66. “They can buy dollars that they have while they are not sending them, it gives them a 5% annual return. So, it is a very powerful solution for companies,” adds the CEO.
Although on this occasion he did not appear to be closed to exploring new businesses derived from the movement of cross-border money - at the beginning of August, Rodrigo Lama, Chief Business Officer at Global66, admitted in a podcast that the fintech is seeking to become the first new global bank - Bercovich emphasized that they remain very focused for now on solving problems in the financial field around payment methods.
“There will probably be transactionality and other things coming to the financial industry in the coming months and years. But that would be in the future,” he concluded.
The report "Remittances in Focus: Trends and Perspectives in Colombia, Chile, and Peru - First Semester 2024" will be released in its entirety this Thursday.
