Latin Americans living abroad sent $174 billion USD home throughout 2025, mostly via a small group of companies: only ten control 80% of flows from the U.S. to Latin America, including Western Union, PayPal/Xoom, Remitly, and MoneyGram – most of which built their agent networks in the 1990s.
More broadly, the money transfer market was worth $12.7 billion USD in 2025, and is projected to reach $44.9 billion USD by 2035, growing at 13.5% annually. The driver is a steady migration from cash-based operators to cheap digital apps – and traditional providers are losing share as a result.
Traditional companies built their advantage on three pillars: physical locations for cash pickup, strong brand recognition and complex compliance systems developed through years of experience. Fintechs have quickly reduced the importance of the first two, however; mobile apps mean many users no longer need physical locations and transparent pricing attracts people frustrated by hidden fees in exchange rates.
A challenge worth confronting
What’s harder to replicate is not experience, but detailed, practical knowledge of how transfers actually work. Sending money from Madrid to Bogotá, for example, is not always simple – banks could reject certain transfer formats, processing times can vary depending on the day, and cash pickup may not be convenient. These operational details affect the user experience, but are often forgotten.
Large traditional firms have the infrastructure to operate globally, but their product decisions are not always based on these day-to-day user realities – leading to small but frequent compounding frustrations: fees shown only in the sending currency, support limited to certain time zones, ID requirements that many users simply don’t have. No single issue is a dealbreaker, but together they add up to a worse experience.
The standard picture of Latin American fintech points to Brazil, which holds 62% of South America’s fintech market share, and Mexico, still the largest single remittance corridor at $61.8 billion received in 2025. But the region is shifting: Mexico’s share is declining, Central American countries like Guatemala, Honduras and El Salvador are growing quickly, and Peru is projected to be South America’s fastest-growing fintech market through 2031.
Madrid has become a practical base for companies targeting this geography: Spain’s EU regulatory passport reduces the licensing cost of operating across Europe, and the city hosts over 800,000 of the country’s 4.2 million Latin American residents – making it cheaper and easier to start as compared to cities like London or Berlin.
TucanPay: A case study in focused ambition
Madrid-based fintech TucanPay specializes in money transfers between Europe and Latin America, and recently closed a €150,000 funding round, with participation from both public and private investors through ENISA, Spain’s national innovation agency. This latest round places the company at a €2 million valuation.
“This milestone is the result of the team’s hard work and the trust of those who believe in what we are building. We remain focused on our goal: simplifying how money moves between Europe and Latin America, and building a fairer bridge for those who live between these two worlds,” the company stated.
ENISA screens applicants on technical feasibility and commercial viability, meaning that inclusion functions as independent validation, which improves the company’s debt-to-equity ratio for future fundraising – the why behind why, beyond the cash, early-stage companies compete for ENISA loans.
Co-founders Fernando Manuel Pinto, Sabas Obregon and Maximo Coronado – Latin American migrants themselves – will use the funds to prepare for the platform’s expansion into Peruvian, Mexican and Panamanian markets; the fastest-growing fintech market in South America, the single largest bilateral money transfer corridor in the region, and a dollarized economy functioning as a financial transit hub for Central America, respectively.
Still, understanding the market only goes so far. The company must also win customers, secure regulatory approvals across multiple jurisdictions, and manage liquidity across currencies – all of which require far more than an initial funding round.
What the market hasn’t answered
The Europe–Latin America corridor moved tens of billions of dollars in 2025, but scale is still controlled by companies with decades of infrastructure and regulatory coverage.
New fintech companies have proven they can build better user experiences, but whether that advantage is enough to overcome the structural realities of the market is uncertain.
The market clearly demands a better product, but the outcome – independent growth versus an early acquisition – remains to be seen. The shift, however, is already underway.
Featured image: Ben Iwara via Unsplash+