As fintech innovation accelerates across Latin America, choosing a sponsor bank or entity—or deciding whether to switch—has become a critical step for fintechs navigating payments programs. With the region home to over 2,400 fintech companies (according to the Inter-American Development Bank), BIN sponsorship is an essential but complex process for startups and growth-stage companies alike.

For early-stage fintechs, partnering with a program manager to access a shared BIN can expedite market entry. However, as fintechs mature, many find this arrangement limits their growth and profitability. That’s when transitioning to become their own program manager and choosing or switching a sponsor bank becomes essential.

This guide will provide insights into BIN sponsorship for fintechs in Latin America, along with practical advice for navigating this process effectively.

The LatAm Fintech Market: A $400B Opportunity

Latin America is one of the fastest-growing regions for digital payments, with total transaction value expected to surpass $400 billion by 2025, according to Statista. Brazil, Mexico, and Colombia lead the charge, driven by high mobile penetration and government initiatives like PIX in Brazil and CoDi in Mexico, which promote real-time payments and financial inclusion.

Despite this growth, 40% of Latin Americans remain unbanked, making fintechs a critical player in driving financial access. However, regulatory frameworks vary widely across countries, making BIN sponsorship and compliance more complex in the region.

What is BIN Sponsorship and Why Does it Matter?

A BIN sponsor, or sponsor bank, is the financial institution that acts as the intermediary between your fintech and the card networks (e.g., Visa, Mastercard). In Latin America, sponsor banks must align with local regulations, such as Brazil’s and Mexico’s Central Bank rules, to issue a BIN and support your payments program.

Sponsor banks ensure your program complies with their internal risk tolerance and revenue goals, as well as regional regulatory requirements. They approve your program, issue BINs, and oversee ongoing reporting on program metrics to ensure regulatory compliance.

In some Latin American countries, securing BIN sponsorship may also require alignment with government-backed payment initiatives like PIX or CoDi.

The Role of Issuer Processors in Latin America

Issuer processors, like Galileo in Latin America, play a vital role in managing the complexities of payment authorization, clearing, and settlement. These processors bridge the gap between fintechs, sponsor banks, and card networks, enabling smooth payment flows while ensuring compliance with regional regulations.

Processors in Latin America may offer additional services to help fintechs thrive in a competitive landscape, including:

• Localized fraud detection and prevention tools: Fraud rates in Latin America are among the highest globally, with more than $1 billion lost annually due to payment fraud, according to Mastercard. Processors can provide advanced tools to mitigate these risks.

• Support for multi-currency transactions: With cross-border e-commerce on the rise, processors that handle multiple currencies (e.g., USD, MXN, BRL) offer fintechs a competitive edge.

• API-first integration: Modern processors enable faster onboarding and feature deployment, critical for scaling in high-growth markets like Brazil and Mexico.

What Fintechs Need to Know About Switching BIN Sponsors in Latin America

Switching sponsor banks or issuer processors in Latin America can be a complex process influenced by regional regulations, the specific requirements of sponsor banks, and the competitive fintech ecosystem. Below are key FAQs to guide fintechs:

Do I need to switch BINs if I change sponsor banks in Latin America?

Yes, if switching sponsor banks, you’ll typically need to obtain a new BIN unless the current sponsor bank agrees to transfer the BIN. However, switching processors may not require a new BIN, provided the new processor already has a relationship with your sponsor bank.

How long does it take to switch BINs in Latin America?

The process can take between 2–6 months, depending on whether you’re managing it yourself or partnering with a third-party program manager. Working with a trusted partner familiar with regional banking regulations—like those in Brazil’s PIX ecosystem—can significantly accelerate the process.

What should I consider before switching sponsor banks?

Before switching, fintechs should prepare to:

• Demonstrate compliance with local regulations (e.g., Mexico’s Central Bank and CNBV’s regulation or Brazil’s Open Banking standards).

• Review and align fraud prevention measures with regional risk patterns.

• Re-establish KYC compliance for existing customers, if necessary.

Key Challenges for Latin American Fintechs

Regulatory Complexity

Latin American fintechs operate in a patchwork of regulatory frameworks. For example, Brazil’s Central Bank requires strict oversight of PIX transactions, while Mexico’s Law mandates specific KYC and AML protocols.

Fraud Mitigation

Latin America experiences three times more fraud attempts than the global average, according to Mastercard. Choosing a sponsor bank and processor with robust fraud detection tools–like Galileo–is essential for mitigating these risks.

Cross-Border Payments

With remittances playing a significant role in the region—accounting for over $150 billion annually, according to the World Bank—support for cross-border payments is a critical consideration when selecting a sponsor bank or processor.

Choosing the Right Processing Partner

Partnering with the right processing platform is critical for fintechs scaling in Latin America. The ideal partner should offer:

• Local expertise: Deep knowledge of regional regulations, including PIX, CoDi, and country-specific compliance.

• Scalable solutions: Support for high transaction volumes, multi-currency capabilities, and innovative payment types like BNPL.

• Fraud prevention: Advanced tools tailored to mitigate risks in high-fraud markets like Latin America.

• Speed to market: Proven ability to navigate complex integrations and regulatory approvals quickly.

Positioning for Success in Latin American Fintech

With Latin America leading global fintech growth, securing the right BIN sponsorship and processing partnerships is more important than ever. By aligning with experienced partners, fintechs can navigate the complexities of the region while seizing opportunities to drive financial inclusion, launch innovative products, and scale profitably.

Looking to modernize your payments program in Latin America? Contact our program management experts to learn how we can support your growth journey.