Mobile Payments Are Transforming Mexico

Mobile payments are clearly catching on, and in some places, more so than others. One place that’s proving to be a surprising hotbed of mobile commerce is the Mexican banking system, which is actually putting a lot of investment into development and introduction of such technologies.

Reports suggest that Mexican banks are putting a distinct effort to drive card-based transactions, as well as encourage more people to get into using banks and financial services, by giving vendors the tools necessary to accept payments for goods and services.

This is putting a particular focus on mobile point of sale (mPOS) systems, so as to allow everybody from clothiers to food vendors and beyond to not only offer wares, but to allow payment from the various mobile means.

Right now, cash is a major form of transaction in Mexico, with around 70 percent of all transactions being done on a cash basis. That alone might not mean so much, but add in the fact that roughly 30 percent of Mexico’s gross domestic product is cash-based, and boosted by the informal economy, and it’s clear there are issues here.

Out of the roughly one million grocery stores in Mexico, 64 percent are family owned, so getting these vendors interested in mobile payments could serve several purposes.

It could help drive up bank involvement, which would be a shot in the arm for the wider system, and it could help raise the overall technological awareness level in the country, which is a further point. It also has one more point in its favor: the ability to better compete with large-scale retailers.

Visa Mexico’s country manager Luz Adriana Ramirez Chavez pointed out that mPOS devices, like the kind currently in development, offer up a great way for businesses to have more control over operations, and be able to sell things that aren’t conducive to cash sales, like bigger-ticket items. This is a measure assisted by things like Tableta Concanaco, an initiative that offered small and medium-sized businesses their own mPOS systems, first introduced in November of 2014.

When this much of a country’s economy is based on cash, it does at least somewhat limit the amount of material that can be bought or sold.

It’s entirely possible to pay cash for a television or even for a car, but the idea of walking around with several thousand dollars—or its equivalent in local currency—can be a daunting thought even for the bravest souls out there.

Having a card or mobile payment system on hand, meanwhile, takes a lot of risk out of the whole affair, and that in turn opens up new opportunities for shoppers, opportunities that smaller merchants could actually get in on ahead of their larger counterparts.