Open Banking in Latin America: Four Markets, Four Realities

Intrust Associates
Jul 12
10 min read

A strategic analysis of how Argentina, Brazil, Chile, and Mexico are navigating the open finance revolution — and what it means for financial institutions entering the region.

Introduction

Latin America is not a monolith. When financial institutions speak of the region as a single market opportunity, they tend to flatten the very differences that define whether a fintech venture succeeds or fails. Nowhere is this more evident than in the uneven adoption of Open Banking — the regulatory framework that allows consumers to share their financial data securely with third-party providers, unlocking a new generation of payment, credit, and wealth management services.

Four countries in particular illustrate how sharply a shared ambition can diverge in execution. Argentina, Brazil, Chile, and Mexico have all moved toward Open Banking and real-time payments, yet each has done so on a different timeline, through different regulatory architecture, and against radically different market backdrops. Mexico was among the world's earliest movers, legislating as far back as 2018, yet today finds itself outpaced by a neighbor that started later but moved with greater precision. Brazil, by contrast, launched its framework two years after Mexico and has become the regional benchmark — the country that proved the model works at scale. Chile entered the game more recently but with a sophisticated regulatory design informed by what it observed elsewhere. Argentina, caught between chronic macroeconomic volatility and a fragmented digital payment ecosystem, is pursuing Open Banking indirectly — letting real-time payment infrastructure do the groundwork before formal regulation catches up.

Understanding these four markets requires more than a regulatory checklist. It demands attention to banking penetration rates, mobile usage patterns, consumer trust, fintech density, and the political will behind each framework. For executives considering regional strategy, the question is not simply "does this country have Open Banking?" but rather: where is it on the adoption curve, who controls the infrastructure, and what does the consumer actually trust?

Open Banking in Argentina: Innovation From the Ground Up

Argentina is a country where economic instability has paradoxically accelerated digital financial behavior. Persistent currency volatility and recurring crises have made Argentinians unusually comfortable with financial improvisation — and unusually skeptical of traditional institutions. The result is a market where real-time payments have grown rapidly, yet formal Open Banking regulation remains absent.

The country's central bank has taken a pragmatic path. Rather than legislating a comprehensive Open Banking framework, it has issued a series of targeted directives designed to create de facto interoperability. The most significant was a 2022 communiqué requiring all digital wallet providers to allow consumers to link any bank account — regardless of which institution issued it. This is not Open Banking in the technical sense, but it captures its spirit: consumer control, portability, and reduced dependency on closed financial ecosystems.

On the payments infrastructure side, Argentina's Transferencias 3.0 — fully operational since 2021 — established interoperable QR codes for real-time, account-to-account transactions. The initiative was further reinforced by a transition away from the older DEBIN pull-payment mechanism toward a new system called TIP, designed to give consumers greater control over who can initiate debits from their accounts.

Yet the consumer landscape tells a more complicated story. Smartphone penetration sits at around 81%, and mobile phone usage is near-universal at 92% — among the highest of the six major Latin American markets analyzed in Mastercard's 2024 Open Banking report. Digital wallet adoption is extraordinary: in a recent survey, roughly 88% of Argentinians reported using the country's dominant digital wallet. The irony is that this wallet cannot yet offer in-country all the payment initiation capabilities it provides in Brazil, where Open Banking regulation formally enables such services. Fintech players in Argentina currently rely on either Chilean-style web scraping or Colombian-style API aggregation to bridge the regulatory gap.

What makes Argentina culturally distinct is the relationship between instability and innovation. Argentinians hold the highest rate of cryptocurrency adoption among the six markets examined — around 28% reporting use, compared to 16-18% in neighboring countries. This is not enthusiasm for speculation but a rational hedge against peso devaluation. The same logic applies to personal financial management tools: in a volatile economy, knowing your account balances in real time across multiple institutions is not a luxury — it is survival. When formal Open Banking regulation eventually arrives, it will land in a market that has already internalized the demand.

Open Banking in Brazil: The Benchmark Everyone Is Studying

Brazil did not invent Open Banking in Latin America. Mexico did. But Brazil turned it into something that works — comprehensively, at scale, and ahead of markets far more established in financial services. That achievement deserves close attention from any institution planning regional expansion.

The Brazilian central bank launched its Open Banking regulation in 2020, roughly two years after Mexico's fintech law first introduced the concept in the region. What distinguished the Brazilian approach from the start was its specificity. Rather than embedding Open Banking within a broader fintech law with vague secondary provisions, Brazil designed a phased rollout: Phase 1 focused on institutional data sharing, Phase 2 on account information services, Phase 3 on payment initiation, and Phase 4 — now underway — on what the country calls Open Finance, extending the framework to insurance and investment products. Each phase had a defined scope and mandatory participation from regulated institutions.

The numbers that resulted are striking. By February 2023 — just two years after Phase 1 went live — 15 million users had adopted Open Banking services. By mid-2023, Brazil's API ecosystem was processing nearly 4.8 billion successful calls per month, more than four times the volume recorded in the United Kingdom over the same period. The UK, it should be noted, took three additional years to reach comparable scale and operates in a market with a fraction of Brazil's population.

The accelerant was Pix. Launched in November 2020 — the same month as Phase 1 of Open Banking — Pix is the central bank's real-time payment rail, free for consumers and mandatory for financial institutions above a certain size. Within two years, it had reached 140 million users. By October 2023, over 70% of Brazil's population was actively transacting through Pix. The synchronization between Open Banking's account information and payment initiation capabilities and Pix's real-time infrastructure created a compounding effect: each reinforced adoption of the other.

The cultural dimension is equally important. Brazil's banking inclusion rate of approximately 85% means a large proportion of the adult population already has a formal financial relationship. Fintech adoption is strong: Brazil hosted around 771 fintechs in 2021, a number that has since grown and continues to lead the region. Nubank — which had already built a customer base of tens of millions with a digital-only model — added Open Finance features to its app in early 2023, allowing users to view balances and transactions from other providers within a single interface. This is Open Banking as a consumer product, not just a regulatory checkbox.

For financial institutions entering Brazil, the competitive window for first-mover advantage in Open Banking is narrowing. The infrastructure exists, the regulation is comprehensive, and established players are already deploying services. The opportunity now lies in more sophisticated applications: cross-sell triggers based on data from competing institutions, automated investment tools using variable recurring payments, and embedded finance interfaces that convert Pix payments into seamless checkout experiences within third-party platforms. Brazil is not at the beginning of its Open Banking story — it is approaching the part where strategy replaces experimentation.

Open Banking in Chile: A High-Inclusion Market Designing for Depth

Chile enters the Open Banking conversation from a position of relative strength. Its banking inclusion rate of 89% is the highest among the six major Latin American markets, its smartphone penetration mirrors that figure at 89%, and its citizens make approximately 235 card payments per adult per year — more than double the regional average and nearly on par with Brazil. These are not the metrics of an underserved market; they are the metrics of a sophisticated one.

This context shapes how Chile has designed its Open Banking framework — and what kind of value proposition will resonate with its consumers. The country's 2023 Fintech Law dedicated an entire title to its Open Finance system, a structural commitment more substantial than the single article Mexico's 2018 legislation allocated to the concept.

Specific API-based standards for both account information and payment initiation providers are expected in the near term, though institutions currently operate through self-regulated web scraping arrangements while awaiting formal technical specifications.

The payments infrastructure question is where Chile's situation becomes most interesting. Unlike Mexico, Chile does not formally prohibit payment initiation — but its existing electronic transfer system, established in 2008, was not built for low-value retail payments.

The gap is recognized. Chile's central bank has been actively exploring how to synchronize a new real-time payment rail for small-value transactions with its Open Banking framework from the outset, an approach that would learn from Brazil's experience of building these two systems in parallel.

What emerges from Chile's market data is a picture somewhat closer to Northern Europe than to the rest of Latin America. Cash withdrawals represent only 23% of total card payment volume — the lowest rate among the six markets, below even Brazil's 24%. Yet Chile has converted much of its formerly cash-reliant population not through a Pix-like system but through card penetration and mobile contactless payments. In 2021, 41% of Chileans reported making an in-store digital payment using a mobile phone, compared to 26% in the United Kingdom. Chilean consumers are already comfortable transacting digitally without cash — which means the demand for seamless, real-time digital financial services is genuine.

The strategic implication for institutions in Chile is different from the one in Argentina or Mexico. Here, financial inclusion is not the primary driver; competition and depth of service are. Chilean banks already offer account aggregation services — a foundational Open Banking use case — to most of their major customers. The next frontier is connecting that aggregated view to payment initiation: allowing a consumer to see all their accounts and instruct a payment from whichever one makes sense, within a single interface, without friction. Chile's population may be smaller than Brazil's or Mexico's, but its financial sophistication makes it a compelling test market for services designed for the next stage of Open Finance.

Open Banking in Mexico: The Pioneer Waiting to Catch Up

Mexico occupies a paradoxical position in the Latin American Open Banking story. It was there first. In 2018 — the same year the European Union's revised Payment Services Directive came into force — Mexico enacted its Fintech Law, making it one of the earliest countries globally to create a regulatory home for Open Banking concepts. It followed this in 2019 with CoDi, a real-time payment scheme built on top of its existing SPEI electronic payment infrastructure. Brazil's Pix wouldn't launch until a year later.

Yet today, Mexico finds itself stalled. The country with the most regulatory seniority in the region has become the case study for what happens when ambition outruns implementation.

The core structural problem is twofold. First, Mexico's Fintech Law focused on account information services — allowing third parties to read financial data — but did not include payment initiation services, the capability that enables a third party to actually move money on a consumer's behalf. The central bank has expressed interest in payment initiation, but as of the time of the Mastercard report, no regulation had materialized. Second, Mexico's API standards are not fully harmonized, meaning that connecting to one institution's data does not automatically enable connection to another. Private aggregators fill this gap, but their reliance on divergent technical standards — and in some cases, on web scraping — limits the coherence and scale of the ecosystem.

The consequences are visible in adoption figures. In the four years following CoDi's October 2019 launch, only approximately 1.6 million accounts out of a population of nearly 128 million had made at least one CoDi payment. The contrast with Pix — which reached 140 million users in two years — is stark. The September 2023 launch of DiMo, a new scheme that links mobile phone numbers to bank accounts in the manner of Pix, is designed to address this, though its impact is still being observed.

Mexico's market context adds its own complexity. Only 45% of the adult population holds a formal financial account — the lowest rate among the six major markets analyzed and well below the regional average of 70%. Smartphone penetration, at 80%, is also the lowest in the group. These are indicators of a market with significant unbanked and underbanked populations, which theoretically makes financial inclusion through Open Banking a compelling imperative — but also means the infrastructure challenge is larger.

And yet Mexico is not without assets. It is the second-largest economy in Latin America. It hosts 773 fintechs — the second-largest fintech ecosystem in the region after Brazil. Alternative credit scoring platforms are already operating, using account data to build financial profiles for consumers who lack traditional credit histories. Buy-now-pay-later products are being offered through mobile money accounts with credit limits tied to responsible use patterns. These are Open Banking use cases operating at the application layer, even without comprehensive regulatory support at the infrastructure layer.

The strategic lesson Mexico teaches is that being first matters less than being complete. A regulatory framework that defines scope, mandates API standards, and enables both account information and payment initiation — deployed in coordination with a trusted, widely adopted real-time payment rail — creates an environment where innovation compounds. Mexico has the first ingredient and is building toward the second. When payment initiation regulation arrives, and a real-time payment scheme with genuine mass adoption follows, the country's fintech ecosystem will be well positioned to move quickly.

The opportunities that remain untapped today may be precisely those that create the most value for the institutions prepared to act when the infrastructure catches up.

A Region of Asymmetric Maturity

What these four markets reveal, taken together, is that Open Banking in Latin America is not a single wave moving uniformly across a region. It is a set of overlapping experiments, each shaped by its regulatory philosophy, its payment history, its level of financial inclusion, and — perhaps most importantly — the degree to which consumers trust their financial institutions with their data.

A 2023 survey across South and Central America found that the leading barrier to Open Banking adoption, cited across Brazil, Colombia, Chile, Argentina, and Peru, was concern about data security. The second most common barrier was a preference for keeping financial information private. These are not technical problems. They are cultural ones. And they will not be resolved by regulation alone.

For financial institutions and executives navigating the region, the implication is clear: technical readiness and regulatory compliance are necessary but insufficient. The institutions that will lead in Open Banking across Latin America are those that earn permission before they exercise it — building consumer trust through transparency, meaningful consent mechanisms, and demonstrated competence in data stewardship. That work is already underway in Brazil. In Argentina, Chile, and Mexico, it is the next competitive frontier.

Sources: Mastercard, "Open Banking in Latin America," May 2024. Banco Central do Brasil. Banco de México (Banxico). Finnovista Fintech Radar, Mexico VIII Edition, 2024. World Bank Global Findex Database 2021. Mastercard Account-based Payments Advisory (APA), 2023.