PANAMA Law and Practice Contributed by: Kharla Aizpurua Olmos, Roberto Vidal, Miguel Arias and Eduardo Oteiza, Morgan & Morgan
Morgan & Morgan Paseo del Mar Ave. 23rd Floor MMG Tower Costa del Este Panama City Panama Tel: +507 265 7777 Email: customerservice@morimor.com Web: www.morimor.com
1. Fintech Market 1.1 Evolution of the Fintech Market
Payment Service Providers These companies offer digital payment processing services, such as peer-to-peer, merchant or cross- border transaction services. Generally, these com - panies offer technological integrations or standalone platforms that facilitate payments in a prompt and secure manner. Cryptocurrency Exchanges Legacy players typically do not engage in this busi - ness model because there is currently a lack of formal regulation. In contrast, new entrants are entering this space and providing these services. Some of these new players offer a wide range of services similar to those of established currency exchanges (including custody of fiat currency and/or cryptocurrency, trad - ing and leverage), while others focus solely on the exchange of fiat currency and/or cryptocurrency. Digital Wallets Due to the lack of regulation regarding digital wallets, legacy players have been able to use their banking licences to provide digital wallets within their respec - tive ecosystems. New players have mostly avoided this business model due to the potential liabilities derived from the possibility of infringing the current Several fintech start-ups are focused on digital lend - ing models, using data to assess creditworthiness for (mostly) personal loans. These platforms offer digital approval processes, with quick disbursements and smaller loans, filling the gap left by traditional lending institutions, which often have strict requirements. deposit-taking regulations. Digital Lending Platforms
Over the past year, the fintech market in Panama has continued to grow and evolve, consistently chal - lenging traditional financing models. According to information provided by the Panamanian Fintech Chamber ( Cámara Fintech Panamá ), more than 100 fintech companies are currently operating in the coun - try covering areas such as paytech, crowdfunding, wealthtech, lending and insurtech, among others. The market remains attracted to Panama’s strategic geo - graphic position, stability and diversity. The different business models continue to pursue compliance by working closely with local regulators, abiding by existing laws and proactively adhering to international regulatory standards. In the next year, given the number of legislative pro - posals submitted before our legislative branch, we expect legislation and regulatory engagement that further encourages continued growth of both interna - tional and local players.
2. Fintech Business Models and Regulation in General 2.1 Predominant Business Models
Even though the fintech landscape is constantly evolv - ing, Panama’s new and legacy players are currently concentrating on a few specific business models, as follows.
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