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Saturday, December 14, 2024

Félix Pago Expands to Central America with Support from Mastercard

Félix Pago, a Miami-based fintech startup that developed a chat-based platform using blockchain and artificial intelligence to enable Latino workers in the US to send money back to their families in Latin America via WhatsApp, has announced a partnership with Mastercard to fuel its expansion into Central America.

This collaboration will introduce Félix Pago’s digital remittance services and Mastercard-powered payment solutions in El Salvador, Honduras, Guatemala, and the Dominican Republic, significantly broadening financial access in these historically underserved regions.

Remittances from the United States to Latin America reached $155 billion in 2023, with Mexico leading the industry with US$67 billion, Guatemala with US$17 billion, Honduras with US$8 billion, the Dominican Republic with US$6 billion, and El Salvador with US$4 billion.

According to Mastercard’s data, 1 in 4 families in Central America depend on remittances from family members in the United States to keep them above the poverty line.

“Félix Pago’s presence in the region addresses a critical need for reliable, secure, and accessible money transfer services,” Said Manuel Godoy, CEO of Félix Pago. “The partnership will deliver an expanded range of financial products and a card issuance program to serve the unique financial needs of both senders and recipients, supporting financial inclusion across Central America.”

Mastercard, Artificial Intelligence and Cryptocurrencies

Félix Pago uses artificial intelligence to send money through a chatbot. The person sending the money tells the chatbot on WhatsApp, either in writing or by voice note, how much money they want to send and to whom. Only in the last step does the sender click on a link to securely fill in their debit card details.

On the receiving end, the money can be instantly cashed out in local currency as a bank deposit, in cash at a store, or, thanks to the partnership with Mastercard, also by card.

“Extending the benefits of the digital economy to more people is part of our financial inclusion mission. Mastercard’s collaboration with Felix Pago addresses a real need in today’s digital-first world to expand digital financial services to more individuals, empowering both senders and receivers to have a safe, simple, and secure remittance payments option,” said Walter Pimenta, Executive Vice President, Commercial and New Payment Flows, Mastercard Latin America & Caribbean.

In the back end, Felix Pago uses blockchain technology to bring greater security and speed to users of both companies. Felix Pago uses Circle’s USDC stablecoin to save on currency exchanges, translating into more affordable transactions for senders. This makes fees much lower than SWIFT transactions, which are also slower.

“Cryptocurrencies are a powerful enabler of remittances, but you have to abstract them from the user. The user doesn’t care. I always say it could be a donkey crossing the border, it doesn’t matter. What they want is the money, the local currency, and they want it instantly and at the best possible price. And cryptocurrencies allow for that, “ Godoy commented.

Mastercard joins Felix Pago’s growing list of prominent allies, including Nubank, Mercado Pago, Intermex, and Uniteller.

Founded in 2021 by the Venezuelan-American Manuel Godoy and Mexican Bernardo García, Felix Pago has expanded across the United States and Mexico and has raised $23.3 million in funding from prominent venture capitalists such as Boston-based Castle Island Ventures, San Francisco-based Switch Ventures, and Miami-based HTwenty Capital Innovation.

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