Miami-based money transfer startup Felix Pago is reportedly looking to enter the financial services space.
This move comes after the company raised $200 million in new funding, Bloomberg News reported Tuesday (Sep. 1).
In addition to offering services such as lending and savings to Latin American immigrants in the U.S., company officials told Bloomberg Felix Pago also plans to develop an artificial intelligence (AI) assistant to help customers make financial decisions.
“This funding round stems precisely from the combination of what users tell us they need and our own ambition to serve them,” co-founder and CEO Manuel Godoy said in an interview with Bloomberg. “We want to build a Goldman Sachs-style experience for a user who has historically been completely underserved.”
As Bloomberg notes, the new financing comes as American policy changes and shifting immigrant demographics are accelerating a transition from cash to digital money transfers, pressuring traditional remittance providers like Western Union and MoneyGram.
FinTechs such as Felix Pago, Remitly and Wise, along with cryptocurrency exchanges including Bitso, are vying for a bigger share of a Latin American remittance market worth upwards of $160 billion a year, the report said.
Felix Pago said it has processed transactions for more than 6 million people across the Americas and operates in 11 countries. Already active in Mexico, El Salvador, Colombia and Ecuador, the company says plans to use part of the funding to expand into countries that include Brazil and Venezuela.
Godoy said the startup’s conversational interface is aimed at address immigrants’ preference for personal interaction when dealing with money.
“This conversational experience came about partly because Latinos are very wary when it comes to money — we want to go to a physical location and speak to a person before handing over our cash,” he said. “The conversational experience really gives people the feeling that they are talking to a real person, even though it’s a chatbot.”
That’s in keeping with recent research by PYMNTS Intelligence in collaboration with Velera, which suggests that conversational AI is moving from a customer service enhancement into a key interface layer between consumers and financial institutions.
“Members who have already switched financial institutions (FIs) were 122% more likely than average to want AI chat support, indicating its emergence as a primary determinant of FI choice,” PYMNTS wrote earlier this year.
“For credit unions and small banks, the risk may extend beyond simply lagging on technology adoption. The deeper threat is disintermediation.”
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