Indonesia unicorn Xendit tests Asian success with Latin America push

[NEW YORK] Xendit, one of South-east Asia’s largest digital payments companies, is expanding into Latin America as it seeks to replicate the success in its home region in other emerging markets – a test of whether its all-in-one payments infrastructure can find traction in a region still catching up in digital finance.

The Indonesian fintech unicorn plans to launch operations in Mexico and Colombia by the end of the year, followed by Chile, Argentina and Brazil in 2026, the company’s chief executive officer for Latin America Raymundo Guerrero said.

Xendit is betting that Latin America’s fragmented payments systems will mirror the early days of South-east Asia’s fintech boom, Guerrero added.

“Latin America is the sexiest market for anyone in terms of payment methods because, given the 10-year lag we are experiencing in the region, this could translate into a huge opportunity,” said Guerrero, who previously headed Mexico’s office for Argentine startup Pomelo.

Founded in 2015, the Jakarta-based firm processes over US$70 billion in payments annually across seven markets, including the Philippines, Malaysia and Thailand. The company serves more than 10,000 active clients, such as Meta, Starbucks, and Samsung, as well as Asian e-commerce giants such as ByteDance’s TikTok and Sea’s Shopee that already have a presence in Latin America.

Xendit joins a wave of companies from Shein Group to TikTok and Shopee who are growing their footprint into Latin America, hoping that the region will mirror a boom similar to growth trajectories in its home continent.

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Its arrival adds new competition to the emerging cross-border payments landscape in Latin America, where services are spread across various companies, including Uruguay’s Dlocal Ltd and Brazil’s EBANX Ltda, on payment processing for global cross-border payments. Other companies have focused on solutions aimed at smaller firms.

Guerrero, who declined to disclose the amount the company is investing in the region, said Xendit will stand out because it allows companies to manage both incoming and outgoing payments, from cards and e-wallets to bank transfers and cash, across multiple countries through a single API. The goal is to simplify cross-border expansion for multinationals and regional firms.

“This will allow us to bring in multinational clients that already operate in other emerging markets and want to come to Latin America and contribute to development and the economy,” he said.

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Xendit is entering a region that lacks a unified regulatory framework and that is facing tighter anti-money laundering rules that have made many banks more cautious about processing payments to and from Asia. Recent enforcement actions by the US Treasury’s Financial Crimes Enforcement Network (FinCEN) against three Mexican financial institutions have prompted banks to adopt stricter compliance procedures, which could slow some cross-border flows, according to Guerrero.

“While banks are somewhat more hesitant to make payments in Asia, that opens up a great opportunity for other types of companies – non-banking, not-so-traditional – to begin capitalising on this, obviously with the proper money-laundering prevention controls and licenses,” Guerrero said.

Xendit joined the ranks of South-east Asia’s most valuable startups in 2021 after raising US$150 million in a funding round led by Tiger Global Management, bringing the total of funds raised to more than US$500 million. The company also plans to begin operations in the US and Australia in the second quarter of next year, said Guerrero, declining to give more details.

The company will seek to tackle Latin America’s challenges in improving the digitisation of financial services by implementing the lessons learnt in various Asian markets, Guerrero added.

“South-east Asia is a region that is about 10 to 15 years ahead in terms of digital payment methods, so this is a company that has already gone through many of the challenges that Latin America is going through,” he said. BLOOMBERG