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Prometeo, a Uruguay-based open banking platform, has rolled out a first of its kind account-to-account (A2A) service that enables merchants to receive payments in real time and with no intermediaries.
The solution allows the platform’s customers to embed bank account payments into their digital channels through Prometeo’s widget.
When paying, users can select their country, financial institution and log in with their bank account credentials to confirm the payment.
The payment goes directly from the consumer’s bank account to the merchant’s bank account through Prometeo’s API infrastructure.
“[T]here are no intermediaries, which makes the user’s purchasing experience fast and with no chargeback costs,” the company said in the announcement.
The service is the first A2A solution in Latin America that has a pan-regional reach.
Prometeo is the largest open banking platform in Latin America that provides a single point of access for banks, fintechs and companies to access consolidated financial information, initiate payments, perform transactions and account validations and build financial management tools.
The platform connects 40 financial institutions in ten countries in the region, including the largest markets with fintech innovations, such as Brazil, Mexico, Chile and Colombia.
“This is an extremely important milestone for our company,” Ximena Aleman, co-founder and co-CEO, told Bloomberg Linea.
“It’s crazy but having no intermediaries in the digital payment process is highly disruptive,” she added.
“We believe that payment infrastructure is the natural next step for open banking in the region. With our A2A payment solution we are completely changing the paradigm for digital payments, allowing our customers to turn their own bank accounts into their payment gateways.”
The A2A service builds on Prometeo’s network of more than a hundred APIs in Latin America.
As the new product is backed by the participating bank’s infrastructure, it has lower risks of chargebacks or unidentified instant payments.
The new product is currently available in Colombia, Peru and Uruguay and is expected to arrive in Mexico and Chile in the coming months.
Although new digital payment technologies, such as digital wallets, investment platforms and e-commerce, have been making headway in Latin America during the last couple of years, A2A solutions were not available in the region until now.
According to the founder of the Uruguay start-up, the new service solves many of the big pain points that exist in card payments, which are typically expensive, have little market coverage and offer a slow and complicated payment reconciliation process for merchants.
Prometeo was launched in 2018 in Uruguay. The company released its payment API last summer with the intention of modernising the financial sector and improving the array of payment options in Latin America, where cash is still king in many markets.
Currently, only a couple of Latin American countries have open banking regulations. Following Mexico and Brazil, in July, Colombia became the third country in the region to establish a regulatory framework for the concept that allows fintechs to access consumers’ financial information.
Argentina, Chile and Uruguay are considering the development of an open banking environment, and with the growing momentum of payment digitalisation and fintech innovation in the region, it is expected that more countries will follow suit.
