[alejandroChavez]

It's always surprising for foreigners, specially from more financially savvy/developed countries, to see how expensive consumer credit actually is in Mexico. An average APR for credit cards (classic average ones) here would be around 60%. For instance, a large american bank that operates in Mexico (one of the largest here in terms of the market), has an average APR of almost 80% for its "Clasic" credit card. On the other side, "Platinum" credit cards for prime users do not generally go below 35-40% APR

[SamBam]

Fair enough, then your does seem a lot more reasonable.

Follow up question: how can you afford to offer more reasonable rates if the credit card companies can't?

[rogereur]

Banks are tremendously inefficient and have to support huge fixed costs for branches. Credit cards also offer a 1 month grace period without interest, so the effective yield they get is lower, thus they have to charge higher.

The cost structure of banks is mainly about credit risk (defaults), fixed costs, origination and servicing costs, and funding costs. For startups the funding costs is the biggest problem because banks fund themselves at close to 0% out of deposits. We have to raise expensive debt. As we drive this cost down, we will have much better conditions for users and merchants

[alejandroChavez]

I guess we are just throwing technology at problems instead of people/brick and mortar branches