Em Conversa looks to uncover the secrets in Latin America (LatAm) that have caused the fintech market to boom, from being worth less than $50million in 2016, to $2.1billion in 2022. In today’s article, we spoke with Yann Turcios, managing partner at Ridivi.
Originally acquiring a company that was going bust, Rividi was co-founded by brothers Yann and Stephan Turcios. This company already had the permits required to make money transfers and cross border payments. From there, the company developed into a financial knowledge provider too, helping clients fight against complexities, paperwork and unexplained charges. With Costa Rica sending around $800million to Nicaragua per year in remittances, Ridivi made it its goal to tackle the complexities surrounding physical money, digitising everything to make transfers much simpler: one key way in which this was done was by layering a payments platform over the globally used social media outlet, WhatsApp. We spoke to managing partner, Yann Turcios to learn more about paytech in the region.
What are some alternative payment methods being seen in Costa Rica and how similar are these to the rest of LatAm?
Here in Costa Rica, we have sinpe móvil, the ACH of the country, developed by the Central Bank of Costa Rica. This platform allows you to integrate your phone number to your bank account, allowing you to send an SMS text with a phone number and a certain amount of Colones (local currency) to any other number on the sinpe system. But we have realised people are not using SMS texts as not everyone is on the sinpe system. We decided to tap into the largely used communications platform, WhatsApp, something that everyone is accustomed to, and layer a payments transfer platform over that to make it accessible to everyone.
Have there been any other developments in financial services which have impacted Costa Rica’s development?
Not really I don’t think – we haven’t really seen QR codes be taken up as they have been in the rest of LatAm – I would go so far as to say they’re already an old technology. In order to use them, you have to integrate Visa and Mastercard services into the POS systems, but this involves additional costs – costs we’re trying to avoid. Furthermore, these services can be slow; our system works in real-time meaning there is no wait for funds to be moved. From a consumer point of view, I personally find them tedious: the scan needs to be perfect or it doesn’t work and I find this incredibly frustrating. It doesn’t make sense to use this technology when you can simply type in how much you want to transfer and send it via WhatsApp – something much simpler.
Due to covid and everything having to turn digital, we created an all in one payments experience: you communicate with your clients through WhatsApp, you charge your clients through WhatsApp – things that weren’t necessary before covid now were. With the crypto boom also taking place, we have implemented a service that allows users to buy and transfer crypto through WhatsApp, creating an all in one experience on the communication platform.
On the topic of crypto, how did El Salvador’s Bitcoin legislation impact Costa Rica? Did it change the country’s general views towards crypto?
I don’t think it really impacted Costa Rica very heavily as we have always been a very crypto-friendly country. In fact, I believe we were one of the first countries in LatAm to have a Bitcoin ATM. The extent of the country’s crypto savviness can be seen in the fact there are various groups moving over $20million a month.
We have had five or six different coins be established here too, including Nimiq, Divi and more. What is interesting about El Salvador’s decision though, is that they decided to abandon USD as their main focus and have chosen to use BTC instead. This means at one point their main currency will stop being produced, which means the solution currently used to increase cash flow, printing more money, will no longer be viable.
What have been some responses to using WhatsApp for payments, and will this technology be rolled out across all of LatAm or is the plan to solely expand within Costa Rica?
We’re still developing the system, now implementing security measures like know your customer (KYC): by comparing what the camera sees, the system will be able to validate if the user making the transaction matches the user’s ID. Additionally, we are looking to make it possible to open your bank account directly through WhatsApp. We want to integrate every type of service into the platform: hotel companies for example will be able to chat to their customers through WhatsApp and pay for whatever they need, whilst also providing feedback, all in a singular location.
We also want to start pushing the crypto side of things – Costa Rica’s legislation doesn’t acknowledge it as a substance of value or money, only as an asset, but if you can do the whole transaction on WhatsApp, that would be great. This is something we’re developing and hoping to have done by September.
We’re also currently expanding to Mexico, planning to open there by the end of the year, where we can tap into a bigger market. We do have offices in Panama, Brazil and more… we do want to expand to Brazil too but currently the Mexican market is what we are looking to break into first.
How have COVID and increased digitisation impacted Costa Rica?
Covid has completely transformed Costa Rica. The central bank has seen a 100 per cent increase in its sinpe móvil, but we have also noticed that generally, the Costa Rican population is becoming more accustomed to not using cash. Despite this, I believe cash will always be king, even though I work in the fintech sector.
Most people have a smartphone but most people don’t want another app taking up space or needing to use data to back itself up. Using WhatsApp, we have latched onto something everybody uses, but we are making it robust enough to substitute having to physically go to the bank because you can do every transaction right there and then.
