As U.S.-China tensions rumble on, fintech unicorn Airwallex pushes into Latin America with Mexico deal
Global fintech giant Airwallex on Thursday said it has agreed to acquire MexPago, a rival payments company based out of Mexico, for an undisclosed sum to help the firm expand its Latin America footprint.
The company, which competes with the likes of PayPal, Stripe, and Block, sells cross-border payment services to mainly small and medium-sized enterprises. Airwallex makes money by pocketing a fee each time a transaction is made.
The deal, which is subject to regulatory approvals and customary closing conditions, marks a major push from Airwallex into Latin America, a market that has become more attractive for fintech firms thanks to a primarily younger population and increasing online penetration.
Jack Zhang, Airwallex's CEO, said the company was looking at Mexico as something as a hedge as it deals with geopolitical and economic uncertainty going on between the U.S. and China.
«U.S. people export to Mexico to sell to the consumer there,» Zhang told CNBC. «Because of the supply chain, you can also export out of Mexico to other countries like the United States.»
«You get both the inflow and outflow of money,» he added. «That's really what we like the most. We can take a global company to Mexico and also help the global companies making payments to the supply chain.»
U.S.-China trade tensions have escalated in recent years, as Washington seeks to address what it sees as China's race to the bottom on trade.
The U.S. alleges China has been deliberately devaluing its currency by buying lots of U.S. dollars, thereby making Chinese exports cheaper and U.S. exports more expensive, and worsening the U.S. trade deficit with China.
China has sought to address these concerns, agreeing to «substantially reduce» the U.S. trade deficit
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