Paisa

Promoting digital financial inclusion for Mexico and Latin America

Company: Through remittance-backed financial solutions, Paisa is opening a new path to financial inclusion in Latin America, starting in Mexico. Paisa leverages the remittance cash economy to power a stronger digital financial services marketplace, starting with  an integral liquidity solution to remittance agencies that includes a line of credit, bank account, and additional products for their customers, so they can pay more remittances, earn more income, and ultimately deliver more value within the remittances ecosystem.

HQ Location & Year Founded: Mexico City, 2021

Founder: Ryan Newton, Founder and CEO, is a lifelong champion of financial inclusion, with a keen eye toward the needs of migrants. Having begun her career at Citibank, she has held leadership positions in a number of prominent organizations, including nearly eight years at Women’s World Banking, and she is second-time startup founder in Mexico. Ryan holds degrees in international studies from UNC-Chapel Hill and Columbia University.

Funds Raised and VC Investors: $650,000 from Forum Ventures, Gaingels, Kleiner Perkins (scout), Latitud, Magma Partners, and Precursor Ventures.

• Where did the idea for Paisa originate?

I have been fascinated by remittances and migration for as long as I can remember. I grew up speaking Spanish in North Carolina with an immigrant mom, becoming aware from an early age of cross-border language, cultural and economic differences.  As I got older, I started writing for local Hispanic newspapers and got interested in understanding why people migrate. Combined with an interest in economics and business, this led me to remittances, an economic manifestation of migration. 

Throughout college and grad school, I delved further into understanding the development impact of remittances, both politically and economically. After grad school, I went to work at Citibank, where I designed and marketed remittance products for key remittance corridors. After the subprime mortgage crisis affected many of us at Citibank at the time, I went to a community development credit union in New York to lead business and product development , where I grew my experience in designing financially inclusive solutions. In search of more global experience, I  went to Women’s World Banking to lead savings initiatives with a gender lens at top retail banks and microfinance institutions around  the world. 

During that time, I moved to Mexico, which is the second largest remittance receiving country in the world, after India, and ahead of China. Also, remittances represent one of Mexico’s top three income flows after tourism and oil.

In all my financial services experiences, I had seen little innovation in the remittances space beyond making the transfer itself faster and cheaper. With the passage of the fintech law in Mexico in 2018, and being based in Mexico, I felt it was time to return to remittances and innovate in a space that had captured my attention for so long. I was co-founder of a digital remittance startup for 1.5 years, which led me to better identify the problem that Paisa seeks to solve, so I decided to found Paisa. 

• What is the key problem that Paisa intends to solve? 

Of the $150 billion in remittances received each year in Latin America, over 85% is paid out in cash and in-person at remittance agencies. Despite innovations in making the transfer itself faster or cheaper, the way remittances are received has barely changed. Remittance agencies struggle with liquidity shortages, thin revenue margins, and client churn, and their financially stressed clients are distrustful of banks and falling short of meeting their financial goals.

Through remittance-backed financial solutions, Paisa is opening a new path to financial inclusion in Latin America, starting in Mexico. Our vision is to leverage the remittance cash economy to power a stronger digital financial services marketplace.

• How are you most differentiated as a service?

For remittance agencies, we currently provide an integral liquidity solution that includes a line of credit, bank account, and products for their remittance recipient customers, so agencies can pay more remittances, earn more income, and ultimately deliver more value within the remittances ecosystem.

For remittance recipients, we are differentiated in three ways:

1. We offer microloans based on recurring remittance history 

2. We leverage a Whatsapp chatbot for loan applications and servicing, as it is a prevalent channel in Mexico, which reduces friction and improves user experience

3. We distribute loans and receive payments through partner remittance agents, which builds trust and provides an accessible onramp to digital financial services 

• What are the company’s key accomplishments to date?

Paisa has disbursed lines of credit (average $10,000) to nearly 20% of our agencies and has disbursed over 1,700 microloans to our agencies’ remittance recipients, with an average loan size of $168. Over 66% of our users are recurring, and 86% of our users are women. 

We have a team of 8 amazing Paisanos who are based in Mexico City, Michoacán, Guanajuato, and Zacatecas.

• What lies ahead in the plans for Paisa?

We have raised a pre-seed round and now are raising seed funding to grow our agency solution, expand our agency network, and increase monthly revenue. We are also migrating to a more robust platform and web admin to scale our capabilities. 

Ron’s Take

We have covered remittance companies previously in this blog, including Rewire (which was subsequently acquired by Remitly), as well as CashEx and TANGapp. All of these emerging companies bring low-cost and efficiency to a critical market that had long been neglected. Paisa takes this journey a step further to working with cash-based remittance agencies and recipients on becoming financially included. For those who live day to day without access to capital or a credit score, alternative sources of capital can be extremely difficult to obtain. Among the neobanks and other disruptions, it is vital to tap alternative means of offering credit for small loans and additional financial services. Paisa is leveraging remittances as a tool for knowing their customer and underwriting loans in the Mexican market. It is a useful innovation and will be worthwhile to follow as this begins to scale globally.