In the global fintech conversation, the U.S. is often the default example of innovation. But when it comes to embedded finance—the integration of financial services into non-financial platforms—Latin America is where the true transformation is happening.
Why? Because the opportunity is massive. With over 650 million people and more than 400 million mobile internet users, LatAm is one of the most rapidly digitizing regions in the world. Internet penetration is approaching 80% in key countries like Brazil, Mexico, and Argentina, while smartphone usage has already surpassed 80% region-wide. At the same time, formal financial inclusion is still catching up — a perfect storm for embedded finance to leapfrog legacy systems and deliver financial access where it’s long been missing.
In Latin America, embedded finance isn’t a convenience, it’s an economic enabler.
In the U.S., more than 95% of adults have a bank account. Financial systems are well developed, and most small businesses have at least some access to credit—even if the experience is clunky.
But in Latin America, more than 200 million people remain underserved or excluded from the formal financial system, according to the SME Policy Index: Latin America and the Caribbean 2024. Many small and micro businesses still operate in cash, with no formal credit history.
In the U.S., embedded finance adds convenience. In LatAm, it unlocks access.
Despite infrastructure gaps, LatAm leads globally in fintech innovation. Between 2018 and 2021, the number of fintech startups in the region more than doubled, according to the same OECD report. Countries like Brazil, Mexico, and Colombia are leading this surge.
The region’s mobile-first behavior makes embedded finance a natural fit. Platforms across food delivery, retail, e-commerce, and services are already integrated into users’ daily routines—making them ideal channels for financial services.
For instance, Helmi Group notes that mobile fintech solutions have seen over 20% annual user growth in Mexico and Brazil alone.
While U.S. embedded finance often aims to improve UX or increase platform loyalty, in LatAm, it fills a much more urgent role: enabling underserved users to stay operational.
A small merchant unable to finance inventory, a delivery driver who can’t repair their motorcycle, or a restaurant that needs capital to cover payroll—these are not edge cases, they’re daily realities.
As Guillermo Bravo, Chief Product Officer at R2, explains: “We focus on income, not legacy. Banks look at who your parents were. We look at what you’re building now.” You can learn more from this interview with Guillermo.
That shift—from static credit histories to real-time performance—is what makes embedded finance viable in LatAm.
Traditional credit scoring often excludes those without formal employment, asset ownership, or documented income. That leaves millions of entrepreneurs, independent workers, and several small businesses out of the system.
Embedded finance models like R2’s use behavioral data and platform transactions to evaluate both: credit-worthiness and repayment-willingness, replacing outdated and exclusionary metrics.
According to the World Economic Forum, “embedded finance can reduce customer acquisition costs by 70% and enable personalized risk models that reach underserved markets.”
LatAm has large, dominant digital platforms that act as centralized ecosystems—delivery apps, merchant marketplaces, POS systems—where millions of users transact regularly.
This makes it far easier to integrate embedded finance directly into workflows. No need for users to download a new app, visit a branch, or fill out lengthy paperwork.
Platforms that work with R2 can:
It’s a win-win infrastructure.
Because the need is so pronounced, the impact of embedded finance in LatAm is much more visible.
While in the U.S., these cases would provide marginal gains, these are transformational in LatAm.
Unlike many digital lenders that were built for developed markets and later adapted, R2 was born with the challenges of emerging economies in mind. It wasn’t designed to optimize what's already working — it was created to solve what’s still missing.
In countries where informal economies dominate, financial histories are scarce, and traditional documentation is inconsistent, legacy credit systems fall short. That’s why R2 doesn’t rely on outdated infrastructure or static scoring models. Instead, it connects directly with digital platforms that already power commerce across the region — and it turns that live activity into a basis for trust.
Let’s break down how the model works in practice.
Most LatAm users aren’t used to lengthy application processes or documentation-heavy systems. Many lack formal income statements, bank records, or tax filings. With R2, users onboard in minutes, directly through the platforms they already use, without needing to leave the app or submit paperwork.
This removes a major friction point and ensures that access to credit doesn’t depend on formal literacy or financial system experience.
Time is everything for small businesses and independent workers. Whether it's a delivery driver needing to fix their bike today or a retailer preparing for a seasonal spike, R2 enables same-day funding.
Funds are disbursed directly into the user’s digital wallet or platform balance, so they can act immediately. No waiting. No branches. No delays.
One of R2’s most distinctive advantages is its revenue-linked repayment model. Instead of fixed monthly amounts, repayments are tied to real-time earnings — allowing businesses to pay more when they earn more and less when things slow down.
This is particularly valuable in LatAm, where many businesses face high volatility due to seasonality, inflation, and informal market dynamics.
The result: credit becomes flexible and sustainable, not a burden.
R2’s infrastructure is fully embeddable and white-labeled, meaning that platforms can offer financing under their own brand, with full ownership of the user experience — while R2 handles the credit, compliance, and risk behind the scenes.
This creates new revenue streams for platforms without adding operational complexity, and strengthens user loyalty by turning platforms into true financial enablers.
Unlike lenders that only target one user profile, R2 is designed to support the full spectrum of digital economy participants. That includes:
This tiered model ensures that no opportunity is too small to serve or too large to grow.
Most importantly, R2 is designed for those individuals and businesses that the banks usually ignore. For the millions of entrepreneurs, small merchants, and platform users in LatAm who don’t fit into the formal financial system, R2 builds a new path — one based on their performance, not their paperwork.
Because the future of financial inclusion in LatAm isn’t about catching up to legacy systems. It’s about skipping them entirely.
So why doesn’t this scale at the same rate in the U.S.?
Because the pain points are different.
In the U.S., most businesses have at least basic access to credit—even if it’s costly or slow. Embedded finance functions more as a UX layer than a critical system. By comparison, Latin America has over 200 million underserved individuals, and only 3 out of 10 adults report having access to formal credit or investment products. That’s not a gap—it’s a chasm.
And while the embedded finance market in the U.S. is larger in terms of transaction volume and venture capital, the impact per user is much higher in LatAm. It enables participation, not just optimization.
Regulatory challenges, digital fragmentation, and a more saturated credit ecosystem make scaling embedded lending harder in the U.S. The urgency just isn’t the same.
Innovation doesn’t always start where infrastructure is strongest. Sometimes, it’s where needs are deepest.
That’s why embedded finance has more transformative potential in Latin America than in the U.S. It’s not about speeding up a good system—it’s about building a system where none existed.
For platforms operating in LatAm, this isn’t a future trend—it’s today’s competitive advantage.
OECD, CAF, SELA. “SME Policy Index: Latin America and the Caribbean 2024”
https://www.oecd.org/dev/sme-policy-index-latin-america-caribbean.htmHelmi Group. “Fintech in Latin America: Trends and Opportunities 2023 Q4”
https://www.helmigroup.com/insights/fintech-in-latin-america-trends-and-opportunities-2023-q4World Economic Forum. “Embedded Finance: A Disruptive Force for Financial Institutions”
https://www.weforum.org/stories/2025/04/embedded-finance-disruptive-force-financial-institutions/Entrevista exclusiva con Guillermo Bravo, Chief Product Officer de R2.
