By any account, cash still reigns in Latin America. The World Bank estimates that just one in five in the region has a credit card, and most residents still lack access to a financial institution.

To fill the void, a host of startups have sprung up — and they’ve chosen Miami as their base of operations. The city is emerging as a hub for electronic payments companies that want to establish relationships with mainstream U.S. financial institutions while maintaining their roots in Latin America.

“It’s now viewed as a neutral location that the region is comfortable doing business with, and where a native technology community is growing,” said Ray Ruga, founder of communications firm CVOX and the head of FinTech Americas, an annual conference held in Miami. “With $5.5 trillion in GDP...and fast growing smartphone penetration and adoption, there is a varied need for payment services and capabilities."

Perhaps the most successful firm to have emerged from the Miami payments community is BlueKite. Founded in 2012, the company allowed consumers in the U.S. to pay utility bills for their families abroad through Florida mom-and-pop cash stores that have relationships with Latin American service providers. Two years after its founding, BlueKite was acquired by Xoom for $15 million. BlueKite cofounder Bobby Aitkenhead now serves as vice president in charge of Xoom Bill Pay and Xoom Top Up.

Other companies compete in the same space. Paganza, based in Uruguay, was recently chosen to participate in Venture Hive, a Miami-based startup accelerator. Leo Vernazza, Paganza’s cofounder, detailed the current payments environment in Latin America.

“In LatAm most people pay their bills in cash using collection networks (like convenience stores or lottery agencies). Even banked people do so,” Vernazza said in an email. “There is a huge gap between what can be done nowadays and what people actually use everyday. We are focused in filling that gap.”

Paganza now processes $100 million a year in payments, and has raised $300,000 from local angel investors.

Datil, based in Ecuador, builds platforms for small businesses to access cash advances on invoices, receive online payments and comply with local tax regulations. They now process approximately 15,000 electronic invoices per day, in addition to 1,000 credit card payments. Last year, the company raised $500,000 from founders and angel investors, and is currently executing a round that will value the company at $5 million.

Datil maintains a rotation of two employees at all times in Miami who serve as a bridge to the major U.S. financial institutions that provide Datil with the backing needed to build products with local banks, said founder and CEO Eduardo Raad.   

Novopayments, Miami’s longest-tenured payments processor at 12 years old, now has more than 9,000 large and small companies as clients and serves 1.5 million individual accounts. The company, which is owned by about 50 Latin American investors according to the Miami Herald, expected as much as 20% growth in 2014.

And YellowPepper, which was founded in Boston but recently moved to Miami’s hip Wynwood neighborhood, now processes more than 30 million transactions per month and counts 5 million active users and counting.

Venture Hive, the professional development program, has emerged as the focal point of Miami’s payments community. It’s founder, Susan Amat, explained why payments companies have been chosen or invited to Miami for the accelerator program practically since its inception.

“There is such a wonderful dynamic between real expertise in financial services, and the ability to have foot in the U.S. and access LatAm and Europe really easily,” she said. “Miami is No. 1 in the world for foreign born population per capita, so you have people who understand the world and world markets.”

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