A Simpler Way to Handle Money

April 2022

In Latin America, you’ll often see neighborhood shops with signs in the window stating "no se fía," which translates to “no giving on trust.” This means that the store owner offers no informal credit — a practice that was common in previous generations. Shopkeepers would offer a fiado credit so families could purchase urgent essentials when they didn’t have cash on hand. This custom was essential, as the neighborhood economy relied heavily on unofficial labor and money sent from family members working in the US.

As globalization made neighborhoods more transient, however, local merchants could no longer trust customers to pay their debts. Businesses stopped offering informal loans, leaving many families in Mexico and Central America with few credit options, and making unbanked families increasingly reliant on remittances sent from the US.

This burden weighs heavily on US-based migrants (a term preferred by the Latinx community over “immigrant”), who are fiercely committed to supporting their families back home. This responsibility was heightened during the pandemic, with the remittances to Mexico surpassing $50 billion in 2020. However, migrants — who represent 15% of the US population — are vulnerable to all kinds of financial abuses. High check-cashing fees, remittance caps, greedy middlemen and theft make the current money transfer process dangerous and untrustworthy. And remittances can only be sent to one family member in Mexico, so migrants can only hope that their money will be distributed fairly throughout the family.

Deirdre Bobadilla and Silvia Schwartz are bringing trust, security and control to cross-border families with the fintech they co-founded, Fiado

Deirdre Bobadilla and Silvia Schwartz are bringing trust, security and control to cross-border families with the fintech they co-founded, Fiado. Migrants themselves, Bobadilla and Schwartz are providing digital financial services to cross-border families by placing them and their pain points at the center of Fiado's solution. Fiado is built to accommodate families across generations and with varying abilities. For instance, Fiado features audio instructions for those unable to easily read Spanish. Fiado even empowers local merchants, many of whom cannot accept credit cards due to the high fees, but can accept Fiado payments.

“Fiado understands migrant family dynamics and the local economies, which enables us to better leverage the river of money coming from US migrants to LatAm.”