RACO Investment’s Randall Castillo Ortega explains how companies can reduce bank fees


Merchants have become more efficient with their customers’ payment experience through digital innovation. Companies have seen their competitiveness increase and their volume of customers increase thanks to the advanced technological systems of FinTech which simplify the invoicing and the collection of money. Randall Castillo Ortega, the founder of SME funder RACO Investment, explains how companies can benefit from it to reduce bank charges.


Castillo says FinTechs offer many benefits to the market, including reduced banking paperwork, faster approvals, payment confirmations, ease of implementation, and affordability for a wider user base. “Transparency in the operation of these entities is important to ensure a better customer experience and a better return on investment for the companies that offer their services,” he adds.


The high cost of commissions is one of the main barriers to banking penetration in different countries. Fenalco, Colombia, reports that the dataphone payment rate is 4.2%. Although there has been a decline in recent years, commissions can vary by size and increase up to 10%.


This charge is 0.8% in Spain and other countries, which demonstrates the high costs of banking services in a country like Colombia. Jorge Rodriguez, director of MasterCard Advisors for Latin America and the Caribbean, said that only 10% are made using cards in Colombia. This is due to the difficulties faced by companies when implementing this payment method.


Businesses also have to pay fees for tools like the dataphone. Companies that choose to finance their operations often face high payment costs. Castillo adds: “FinTechs can also be a key ally in reducing the operational costs of recovering and collecting wallets. FinTechs are a technology platform that streamlines business financing operations. They are also doing away with traditional methods of financing and managing funds.


FinTechs have made existing borrow-and-lend systems more efficient. Many companies no longer need an entire wallet team to manage payment for the financed purchase. FinTechs provide customers with external funding, which means they are responsible for raising the money. This relieves traders of the burden.


Digital wallets are a service that can be used to finance funding, and it is one that stands out among FinTechs. They are useful for reducing costs and simplifying existing processes. This results in lower costs than traditional banks. Processes are also faster and more automated, increasing the efficiency of corporate payments.


In Latin America, on average, the portfolio of consumer credit and loans for the purchase of goods and/or services grew by 11.54% to reach $155.4 trillion at the end of 2013. These figures show consumer acceptance of credit. It is also a relief for companies that FinTechs take care of the collection and financing tasks. They use non-traditional methods to assess credit risk and determine loan interest rates.


Castillo suggests that consumer financing, which is done by an expert third party like a FinTech, allows retailers to close more sales by giving their customers the option to pay in installments or with lower interest rates.


FinTechs can offer customers very low interest rates compared to other payment methods. They offer loans at very low interest rates with no hidden fees or application fees. Customers can cancel the loan at any time or make advance payments.


FinTechs are able to offer simpler, faster and more secure payment solutions for customers, whether at the point of sale or via eCommerce. It also provides economic benefits to merchants, such as savings on operating costs and bank payments. However, they also have competitive advantages and can offer customers flexible and attractive payment options.


About RACO Investment


RACO Investment is a financial investment company serving small and medium enterprises in Panama and Costa Rica. It was founded by Randall Castillo Ortega, an expert financial advisor who has his roots in the import and export industry in Latin America. The company has helped many startups find the financial backing they needed to get started. It has also provided bridging loans to help those looking to restructure or improve their operations.

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