April 09, 2021 at 11:41PM

Argentina’s mobile payments app Ualá plans to acquire Wilobank, the country’s first digital bank, Bloomberg reported on Friday (April 9), citing people with knowledge of the matter.

The acquisition would help Ualá, which gives unbanked consumers access to financial services by linking a prepaid card to their mobile app, expand and reach more customers. With Wilobank’s banking license, the FinTech would be able to serve pensioners and those on government welfare who are required to have a bank account to receive government payments.

Serving the underbanked is a particular challenge in Latin America, where almost 50 percent of the population does not have access to financial services. Solving this problem also requires promoting financial education, Paula Arregui, chief operating officer for Mercado Pago, told PYMNTS recently.

“In some countries in the region, the use of digital payments is sometimes discouraged directly from shops due to high taxes or the high informality in the economy — also a direct consequence of a poor financial education — that contributes to many people only using cash,” Arregui said.

Wilobank was founded by Argentinian billionaire Eduardo Eurnekian, who would become a minority shareholder of Ualá. The bank has 240,000 savings accounts and has issued over 170,000 debit and credit cards, enabling underbanked consumers to establish credit. Bloomberg cited data from the Central Bank of Argentina from September 2020.

Ualá, which was last valued between $850 million and $950 million after its last funding round in 2019, aims to move beyond a mobile app to a “full payments ecosystem,” Founder and CEO Pierpaolo Barbieri recently said. The FinTech announced in December that it would launch a line of services for small to medium-sized businesses (SMBs), beginning with a mobile point-of-sale (mPOS) device.

The FinTech, which has issued 2.7 million prepaid cards in Argentina since 2017, launched operations in Mexico in 2020.

Report: Mobile Payments App Ualá To Acquire Digital Bank Wilobank …

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