Fintechs are a quickly rising presence within the Dominican Republic, the place they promise to enhance inclusiveness in a still-underbanked nation.
Together with Jamaica and Puerto Rico, the Affiliation of Fintech Corporations (Adofintech) has spotlighted the Dominican Republic as a fintech chief in Central America and the Caribbean. The Inter-American Improvement Financial institution (IDB) studies that the variety of firms the island nation hosts within the discipline grew from six in 2018 to 65 in 2024. This locations the nation eighth in Latin America for its fintech economic system and the chief in Central America and the Caribbean.
Dominican Republic web banking and digital funds are exhibiting substantial progress of over 20% year-on-year from 2023-2024, together with spectacular innovation. That is very true in reference to tourism and remittances, which mixed make up 30% of the nation’s GDP. Living proof is Qik, the nation’s first neobank, which Banco In style launched in 2022 and which has quickly grown from an app to a standalone digital financial institution with over 600,000 clients.
A part of the fall-out from the Covid-19 pandemic within the republic was elevated demand for non-traditional monetary providers, coupled with accelerated digitization. Improved regulatory steerage from the Central Financial institution of the Dominican Republic and the Superintendencia of Banks, together with the Innovation Legislation of 2016 and a concentrate on monetary inclusion, has invigorated the fintech sector, says José Alberto Adam Adam, nation supervisor with Equifax Dominican Republic.
“The [fintech] trade has developed towards higher diversification, technological sophistication, and a concentrate on monetary inclusion,” he says. “There’s now multi-service growth, fintechs for particular segments like private finance instruments for Technology Z, and banking options for migrants or casual staff.”
On the higher finish of the fintech ecosystem are startups exploring tokenization and decentralized finance (DeFi) and using synthetic intelligence in credit score scoring. The trade has come a good distance, Adam notes, since BlueWallet, a Bitcoin pockets, and PrestamistApp, a mortgage calculation and administration assist for monetary establishments, launched in 2018.
Monetary inclusion has lagged up to now, regardless of the republic’s constant GDP progress; solely 55% of adults are banked, making it “one of many Dominican Republic’s essential challenges,” Adam argues. “The focus of supply-side efforts on the beforehand banked inhabitants is about to succeed in peak penetration. Subsequently, changing the unbanked inhabitants would considerably assist the financial sectors we have to proceed rising.”
Adam says to attain that might entail a shift in focus to “inclusion, effectivity, scalability, and new hybrid fashions that mix one of the best of the normal and decentralized worlds.” New efforts embody fintech, cell banking, education schemes, and gender-focused initiatives. The central financial institution has focused incorporating 65% of adults throughout the monetary system by 2030.
A Blockchain Help
In April, PaySett and Jamaica’s JMMB Financial institution partnered to broaden into the nation and can present enhanced digital funds and monetary inclusion by way of PaySett’s PayBank resolution.
Félix Pago, a Miami-based fintech start-up, added protection to the Dominican Republic in addition to the Northern Triangle of El Salvador, Guatemala, and Honduras late final 12 months. This adopted a partnership with Mastercard that may see a chat-based platform carrying remittances out of the US. Félix Pago makes use of USDC stablecoin to save lots of on foreign money alternate prices and passes on the financial savings to purchasers for a decrease charge than on SWIFT transactions.
“Cryptocurrencies are a strong enabler of remittances,” CEO Manuel Godoy mentioned in a press launch, “however you need to summary them from the consumer. I all the time say it might be a donkey crossing the border, it doesn’t matter. What they need is the cash, the native foreign money, and so they need it immediately and at the very best value. And cryptocurrencies enable for that.”
Final August, the Worldwide Financial Fund (IMF) printed a technical help report assessing the potential affect of a central financial institution digital foreign money (CBDC) on retail transactions within the Domincan Republic. It discovered that whereas the nation has a well-developed nationwide fee system, additional enhancements are crucial. Money stays king within the area, and the IMF estimated that take-up of a Dominican CBDC would affect as much as 20% of transactions, which in 2017 had been over 90% in money.
Keep forward of the curve with NextBusiness 24. Discover extra tales, subscribe to our e-newsletter, and be part of our rising neighborhood at nextbusiness24.com
