3 dimensions of Mexico: payment experience

Mexico is hot right now. by all mean of the word. It may not be as hot in fintech as the Brazilian competition, but it gets there. This is Mexico the moment I saw it
In the eyes of tourists and locals.

Scene 1. Cancun, Mexico Tourist.

“When we got to the most touristy place in the country, we expected to be fine with our MasterCard bank cards. There are thousands of Americans visiting this place every month. What a surprise: it’s only exclusive money. Everywhere. From everywhere. …expensive restaurants and souvenir shops to taxis. And what is mind-boggling is that the ATMs there won’t give you the local pesos. They will spit US dollars. It took us a while to find a suitable one.” (Tourist)

It seems that the films are not far from the truth. Cartel wars are happening as of now fighting around hotspots for tourists. Taxis cannot exit their designated area on a death warning (eg a taxi from Cancun may not be able to enter Tulum). Uber drivers can’t show anyone that they are stealing jobs away from taxis. Armed guards are deployed on the beach and everywhere to ensure that no tourist is killed by an accidental bullet.

What does this have to do with payments? Well, that explains the criticism, right?
How transparent can bank card payments be when the company operates in such conditions. Either tax evasion will happen in the open, or companies have to share a portion of their revenue with cartels. I wonder what is the purpose of using US dollars at local ATMs.

Scene 2. Mexico City, Mainstream Mexico.

“We parked in the wrong place, got wheel locks and had to fine the government. It would have been a nightmare if we were in any other country, but not in Mexico. All it took was a trip to a nearby supermarket, which the cashier made Scanned the code from the fine slip, did some magic in his computer and the payment was made. For some reason our international cards couldn’t be used for this transaction, but we had cash. We showed the receipt to the cop and freed our car in a jiffy.” (tourist)

Mexico is high in smart cash payments. It’s sometimes called coupon payments, supermarket pay, or simply by the name of the supermarket, like OXXO.

Supermarkets, regardless of their size, play a very important role in society, performing many banking functions. At the cashier you can pay utility bills, internet, top up your mobile phone or online game account, transfer money to someone else, pay off loans, fines, any government or business payments.

Supermarket cashier software systems are designed to support this diversity and process these payments in real time. This is unique to Latin American countries, although you may find a similar variety in Southeast Asia as well. It used to be the same sophistication in electronics stores in the former Soviet Union until the soulless street machine triumphed.

“I used to pay in OXXO all the time many years ago. But now everything can be done in my bank app, so there is no need. I think younger people and civilians prefer to do everything inside their bank app. We can also pay by card everywhere. But for For the more traditional people who don’t trust banks and stick to cash, this is their way of paying.” (Sweetened)

Scene 3. Chiapas, the jungle of Mexico.

“There was a very unstable mobile reception in that forest, but cards were accepted everywhere. No Apple Pay or Google Pay though.” (spoiled tourist)

Well, although Mexico is still advertised as a cash-heavy country, that is not what is happening there now.

Mexico has been dominating the flow of IT news in Latin America for the past year. The headlines were abuzz with New Mexican Unicorn stories – Cavak, Used Car Market, Bitso, Crypto Exchange, Clip, Payment Processor, Konfio, SMB Loan Company, Clara, Digital Bank, Incode, Verification and Authentication Platform, Merama, E-Commerce Aggregator. Of the 17 rhinos in Latin America, 9 were established in Mexico in 2021.

Money is flowing. Other countries unicorns are rushing to try their luck. why is that? I think aside from being a huge market for succulents (obviously), Mexico has upgraded its approach to regulation. Mexico now has clear rules in place for fintech. Open banking, mobile payments, remittances, crowdfunding – all new things, disrupting traditional businesses, can now be done in a controlled sandbox environment.

The Mexican banking system is big on real-time payments
SPEI. This is a system that allows faster transfer of funds between individuals and businesses, within 30 minutes.

“When I pay for things or transfer money to my friend from within my bank app, all I need to know is the internal account number. I often see SPEI mentioned on the receipt.” (Sweetened)

But we’ve seen instant pay bars all over the world, instant transfers by phone number linked to bank accounts, or by QR code linked to bank accounts. Mexico is no stranger to this either.CoDi instant pay rails built and launched in the midst of the pandemic Unfortunately it hasn’t taken off yet.

For instant payments, Mexico has decided to rely on QR codes, not phone numbers. You are supposed to scan the QR code from your banking app, and generate the code within it as well. The bank must participate in the system. It looks a lot like Alipay/WeChat. However, we still have to see this kind of payoff to take off and gain momentum.

Overall, I think Mexico is in a very good position to compete with Brazil for the award for the fastest growth in fintech. Let’s see that it will change in a couple of years and how slowly cash will transform into digital banks and QR code payments out there.


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