Did you know that as of 2015, 70% of all purchases in Mexico were made in cash?
As a bid to try and encourage people to use card payments, Mexican banks collaborated with payment technology vendors. However, it still seems that these payment aggregators are still lacking in Mexico.
But what does this mean for the country? And how much more ground has to be covered until the country isn’t predominantly paying in cash?
When we refer to payment aggregators, we are referring to service providers through which e-commerce merchants can process payment transactions. They allow merchants to accept credit card and bank transfer payments without needing to set up an account with a bank.
In neighbourhoods within Mexico City, such as Condesa, there are many restaurants, art galleries, and shops who have this type of payment. Which of course makes it an appealing place for tourists to visit because it is easy to purchase services and products.
For the Mexican population, the lack of payment aggregators doesn’t matter that much, because most of the population pay in cash. Most of the locals pay in cash for purchases under 500 pesos or less.
However, the lack of payment aggregators isn’t ideal for tourism. Without tourists the cities in Mexico struggle, due to economical issues.
Luckily, the issue has been noticed and is being worked upon. According to online entrepreneur Alejandra Torres from Reviewbox, there have been an abundance of fintech startups in Mexico who are focused solely on the payment and remittance industry. These startups are aiming to improve Mexico’s economy by introducing more payment aggregators around the country and not just in the most popular areas.
There are some businesses who offer to integrate the use of card payments and cash withdrawal, such as Mr Pago. Mr Pago accepts credit and debit card payments and allows users to withdraw cash.
José Luis Merino, Director of Operations at Mr Pago, said that places such as Condesa, Del Valle, and the Rome area all have adapted payments of this type, however other areas still need to follow suit. Merino added, “You realize in some municipalities you go to a market and still no one accepts card payments”.
Increase in Sales
Implementing payment aggregators doesn’t only improve tourism in the country, it can also improve a merchants sales. When a merchant uses card payments instead of cash payments, its sale increases by up to 30%.
Sales can increase because there is less friction between buyer and seller and more opportunity to do international business. This increase in sales can help to boost the merchant’s business and also improve the wider economy.
What Does the Future Hold?
With a number of fintech businesses trying to help payment transactions and improve the economy, it looks promising that Mexico can improve their financial services.
Nobody knows what the future holds, but the electronic payments that these fintechs are offering will be key to developing the country’s economy and boosting businesses.
Find out more information about businesses in Yucatan.
The Yucatan Times