- Mastercard announced the acquisition of payments processor Arcus FI last Wednesday in a press release, expanding the credit card company’s foothold in Latin America. The terms of the deal were not disclosed.
- According to the companies, Mastercard will tap into Arcus’ technology, network and customer relationships to accelerate the introduction of Mastercard Bill Pay in Latin America.
- Arcus provides payment options for everything from pay-tv to utilities to Uber rides through banks, fintechs and digital wallet providers.
Mastercard said the acquisition will allow it to "help support the delivery of bill pay solutions and other real-time payment applications across Latin America." Among the companies that use Arcus services are the banks BBVA and Santander as well as virtual card company Marqeta and retailers Walmart and 7-Eleven, according to the company's web site.
Founded in 2013 by Iñigo Rumayor and Edrizio de la Cruz, Arcus aims to help immigrants like themselves to keep better track of their finances. The company has offices in New York and Mexico City.
According to Crunchbase, Arcus has raised $19.7 million through five separate funding rounds. Arcus also participated in Mastercard’s Start Path program, which provides startups with access to Mastercard’s technology, expertise and resources to scale their businesses rapidly. Arcus has attracted some blue-chip investors, including Citi Ventures and the SB Opportunity Fund.
Latin America is facing its worst economic downturn in 200 years, which Mastercard argues underscores the need for digital payment options. The card company has vowed to bring 5 million people in El Salvador, Guatemala and Honduras into the formal financial economy and digitize 1 million micro and small businesses.
“The past year has shown how critical digital solutions are for people and businesses across the region,” said Laura Cruz, division president for Mexico and Central America at Mastercard, in a press release. “With the addition of the Arcus team, we will enhance existing payment experiences and create new opportunities to address everyday needs by connecting more people to the digital economy.”
Lain America is a focal point for Purchase, New York-based Mastercard. The company's partnerships with fintechs, non-government organizations and governments in Latin America are part of an effort to bring people and businesses into the digital economy. In one such effort, the company has created a digital payments program for farmers in Mexico that provides them access to cash in their villages. Otherwise, they would have to travel to a cash-checking service in the nearest city, according to a press release.
Mastercard reached its five-year goal last year to bring 500 million previously unbanked people into the world's financial system, the company said. It now plans to bring 1 billion people and 50 million small businesses into the digital economy by 2025 and to support 25 million women entrepreneurs.