Argentine fintech ual is launching a push into mexico, hoping to replicate the success it has experienced in its domestic market as the coronavirus crisis accelerates a move away from cash.

The softbank-backed start-up, which offers debit cards and a digital payments service, wants to tap into mexicos large unbanked population where nearly two-thirds of its 126m inhabitants do not have a bank account. that is a greater number than the unbanked population in argentina, where 7 per cent of the population now use uals digital wallet for banking transactions following the companys launch three years ago.

When we saw the impact of covid on transactions in argentina we accelerated the development of our mexican product, said pierpaolo barbieri, the 32-year-old founder and chief executive of ual, who has had a team working in mexico in secret on a launch for the last 18 months.

Covid is making cash less relevant. as people transfer more of their spending to online services, they need a card. you cant sign up to netflix, spotify [etc] with cash, so ual has become an enabler of the digital economy. the company will launch in mexico on tuesday.

Transfers into ual accounts have doubled since the pandemic truly hit the region in march while bill payments tripled. mr barbieri says that the companys employees will also double this year to 500.

More people use ual, and those that already have it use it more. we are also seeing the highest ever numbers of people asking for loans,he said.

The companys success during the crisis has been mirrored by other fintechs in the region, such as neighbouring uruguays dlocal, a cross-border payments processor, which reached unicorn status earlier this month after securing $200m in funding. it is now valued at $1.2bn.

With more than 2m cards already issued in argentina, mr barbieri hopes to issue 30,000 debit cards in mexico over the next six months in association with mastercard.

Ual, whose latest valuation was $900m, has enjoyed particular success with younger users in argentina, with nearly a fifth of 18 to 25-year-olds owning a ual card. it is also popular with those living outside the capital city, with 70 per cent of users being based outside buenos aires.

Ual accounts can operate with the regular banking system, allowing users to transfer money instantaneously and for free from ual to any bank account, and vice versa. the company is not licensed to hold deposits but provides financial services including personal loans, placing customers money on deposit at another bank.

Mr barbieri chose mexico over neighbouring brazil where there is already a competitive and thriving fintech sector for ual to expand into, arguing that the authorities were eager to support more financial inclusion and that the company would benefit from mexicos fintech law passed in 2018.

The goal is to launch a truly disruptive product in mexico, he said, arguing that ual offered an improvement on existing products given its experience in argentina and the local expertise of the new mexican team.

But he conceded that, as in argentina, the companys number one competitor is cash.

We think its a profound inequity that 65 per cent of mexicans are outside the financial system, but we think we have a product that could help to bridge that gap, he added.