The FinTech niche in Costa Rica

Abogado Alonso Fonseca

FinTech is an acronym that results from putting together of two English words: Finance and technology. Its concept makes an effort to define the work of companies trying to break the traditional ways of conducting businesses and offer financial services, taking advantage of the current technologies and mobile services. The FinTech niche is relatively new in Costa Rica, although it has decades of existing in other nearby latitudes.

The breaching of the traditional services paradigm has started in Costa Rica in other sectors, all the cases have had one element in common: The birth of an intangible platform (usually in the form of an app for mobile operating systems) that re-thinks the way, content, payment and general structure of hiring a service.

The FinTech’s case is specially interesting in Costa Rica due to business opportunity and regulation matters. Unlike other countries, in financial issues the Costa Rican regulation does not establish state-controlled monopolies nor excessive restrictions for the entrance of new competitors to the financial market (distinct to the case of the regulation directed exclusively to the traditional banking activity, which is fairly direct and dense).

The current Costa Rican regulation, specifically the broad liberty-legality principle of private law, the new consumer law regulations and the active role of the Superintendencia General de Entidades Financieras (Financial entities general supervisor) without a doubt, allow the entrance, development and operation of FinTech companies in Costa Rica.

Leaving aside the regulatory aspects, the Costa Rican market is an attractive one for reasons such as the existence of a consolidated investment and foreign tourism market that are eager to maximize the advantages of FinTech’s services, the concentration of the regulation (the same law applies to the whole territory), the existence of a mature technology related hub (specialized in customer service with a sophisticated bilingual capabilities); and, furthermore, there are already important and successful examples of services and FinTech companies that have entered Costa Rica.

This is the key moment to seize the oportunity of the growth in the demand of this services, the search for the correct legal assestment with the enough know-how is a must for the interested investors and service providers.