Fintech in Latin America has long been associated with rapid, chaotic growth and weak regulation, as if it were an unexplored frontier. Yet, as we move into 2025, in countries as wide-ranging as Mexico, Brazil, Chile, and Peru, regulation is becoming stricter in the wake of a booming digital payments environment and increasing cyber fraud. Compliance is not something you just go through the motions to do; it is an integral part of the fintech business model.
Compliance Is No Longer an Opt-In
“Fintechs will fundraise, but 2025 is the critical inflection point, and then you need proper licensing to scale,” says Roman Castro, a LATAM market analyst. It’s still a region of investment, but there’s an increasing focus from investors on how startups are mitigating risk. Let’s look at the regulatory updates by country.
Mexico City: Key Developments
The government in Mexico has a well-publicized problem with corruption, which makes it all the more admirable that local investigators recently brought charges against a powerful official from the previous administration.
Key Developments
The pandemic has influenced Mexico’s response to the pandemic, but the fight against fraud is going strong. The increase in technology-related fraud, specifically for stock trading and account fraud, has led the CNBV to adopt new regulations that will enter into force as of June 15, 2024.
Key Requirements
- All licensed fintechs are required to put in place an official fraud policy.
- User-based transaction limits will be imposed.
Why It Matters
In the past year alone, Mexican consumers lost 293 billion pesos to fraud, and nearly 60 percent are targeted at least once a month by some kind of scam. The government is transferring liability to lenders who can’t protect against fraud.
Deadlines
- Fraud reduction plan: 6 months
- System roll-out: 10 months
- Transaction limits: Max use during 16 months period
Bottom Line
Whether banks that do not cope well with technological changes could become automatically liable for the customer’s loss.
Brazil: PIX Is Under the Lupe
New Restrictions
Brazil’s instant payment system PIX is under investigation over large fraud losses of nearly R$2.7 billion ($479.9m) in 2021. The Central Bank followed up with fresh regulations in November 2024.
Key Restrictions
- R$200 cap per transaction on new devices.
- Daily limit of R$1,000 on transactions.
Implications
Combined, these actions are designed to thwart cyberthieves but make operations trickier for fintechs, such as those dependent on PIX for instant payments, demanding a deeper level of device intelligence and behavioral analysis.
Chile: Reducing and Reversing on Fraud
Regulatory Changes
In Chile, measures are being strengthened to combat financial crime with Law No. 20.009. Changes will go into effect on August 1, 2024, particularly targeting growing fraudulent practices.
What’s New
- Means of payment scam officially considered a crime.
- Fintechs will shoulder refunds unless they can prove fraud.
Heads Up
This, in turn, will drive up both the legal risk and the cost of authentication for fintechs that don’t have strong refund-related and transaction data controls.
Peru: 2FA Mandatory by Law
New Regulation
For those in Peru, the new SBS Regulation No. 2286-2024 has made 2FA obligatory for all companies.
Timeline
- Card-present debit: In force now.
- Card-present credit: New cards by July 1, 2025; existing cards introduced at renewal.
- Card-not-present transactions: All industry participants must use 2FA by July 1, 2025.
Why It Matters
Banks and payment providers face liability for unauthorized transactions with cybercrime up over 40% if they cannot adhere to 2FA rules.
Regional Trends: What’s Really Going On Here?
Macro Trends Affecting the Fintech Licensing Landscape in LATAM
- Changes in Liability Shifts: The burden of fraud is increasingly falling on banks and fintech companies, even when both parties cannot be blamed for customer negligence.
- Enhanced Authentication Methods: Static credentials are no longer enough, and more dynamic solutions such as biometrics and OTP are taking precedence.
- Localized Regulation: There is no regulation on a regional level, yet each country is starting to build its own compliance standards, forcing the hand of multinationals on a market-by-market basis.
- Legal Liabilities for Bad Customer Service: This invites lawsuits and not just PR disasters if fraud and chargeback requests are not handled properly.
Your Survival Guide for LATAM FinTech 2025
If you’re building a fintech company in Latin America, think about the following checklist:
Key Action Steps
- Preventing the Up-sell Scam: When building, develop systems that are flexible and can scale and change as your business does.
- Leverage Device Intelligence: Utilize activity monitoring to stop fraud as it happens.
- Increase Authentication: Paywalls or 2FA are great ways to secure your site, especially when dealing with payments.
- Have Legal Teams Ready for Battle: Compile all the proper evidence for refunds and chargebacks to reduce risk.
- Teach Your Customers: Instruction on how to prevent fraud reduces your risk and liability.
- Form Compliance Teams in Each Locality: Each market is different, so comply differently.
- Work with Regulators Early: Engage early in the process to include regulatory considerations in the design of new services.
Risk Zones to Monitor Closely
| Country |
Risk Focus |
| Mexico |
Puts Future of Bank Bailout on the Line |
| Brazil |
Alert on device-based payments fraud is elevated |
| Chile |
Legal risk exposure via poor chargeback controls |
| Peru |
2FA mandatory and total liability if not complied |
Final Thoughts: Compliance Is More Than a Legal Obligation—It’s Also Good Business
You’re almost certainly already behind if compliance seems like a chore. In LATAM’s fast-paced fintech jungle, being able to show robust security and compliance can represent a competitive advantage. Of course, it requires investment and can be complicated for companies to adopt and follow; nevertheless, being compliant will build trust faster, enable sustainable growth, and ultimately help you survive through legal issues. In a domain rife with fraudulent activities and con artistry, trust is crucial.
Do you need a license in El Salvador?
Yes, you do. If you plan to operate a fintech or crypto-related business in El Salvador, you will likely need a license, especially if you are handling digital assets, providing wallet services, or holding customer funds. The country has established a licensing regime through its Digital Assets Law, and failing to register could result in significant fines.
Do you need a license for cryptocurrency?
In most cases, yes. Providing crypto services such as exchanges, wallets, or token issuance typically requires some form of regulatory approval. Regulations differ from country to country, but El Salvador, Brazil, and Mexico are all working toward formalizing licensing procedures for crypto platforms. It is advisable to be licensed to avoid potential issues.
Is El Salvador crypto friendly?
Absolutely. In 2021, El Salvador gained international attention by becoming the first nation to adopt Bitcoin as legal currency. Since then, it has implemented pro-crypto laws, tax incentives, and Bitcoin bonds to attract blockchain startups. It is one of the few places where the government and the crypto industry collaborate closely.
How can I join crypto?
It depends on your goals:
- If you are an individual looking to buy or trade crypto, you should start by creating an account with a reputable exchange, setting up a digital wallet, and learning basic security measures.
- If you plan to start a crypto business, the process is more complex. You will need to:
- Carefully select the jurisdiction for legal matters.
- Obtain a license if required.
- Incorporate compliance into your business infrastructure.
- Consult with an attorney or local professional.
Establishing the correct legal and technical framework from the beginning will save you considerable hassle later on.
