This transition is also leading the emergence and growth of various alternative payment methods, catering to the evolving needs of consumers.
WHAT ARE THE MOST PREFERRED APMS IN MEXICO?
Buy Now, Pay Later (BNPL)
BNPL payments have gained considerable traction in the Mexican payment system due to their flexibility and ease of use. Expected that this payment method will see significant growth globally, with predictions of reaching US$400 billion in volume by 2026. In Mexico, specifically, the BNPL method is forecasted to grow by over 80% after growing 82% in 2022.
Bank Account-Based Transfers
This method has become increasingly relevant in Mexico and Latin America, with an annual growth rate of 86% since 2018. Convenient with widespread availability. Expect to see the annual growth rates continue well into the latter 2020's.
Oxxo, an omnipresent convenience store chain in Mexico, facilitates cash payments for e-commerce transactions. Customers can generate payment vouchers through e-commerce platforms and pay in cash at Oxxo stores. This method is particularly popular due to the high rate of cash usage in Mexico and a large unbanked population. As of 2023, there are over 21,000 Oxxo stores in Mexico, providing unmatched reach and convenience for consumers. This may be the most important APM in Mexico.
In 2022, digital wallets accounted for 19% of all payments in Mexico. This growth is expected to reach 25% by EoY 2023. What's driving the popularity? Digital Wallets are increasingly appealing to consumers who are comfortable with digital transactions and seek convenience in their payment processes. See our post on Top Payment & eCommerce Trends in Mexico for more insight.
Banco de México has introduced a national digital payments platform, CoDi, to enhance digital payments in Mexico. CoDi utilizes QR codes and near-field communication, allowing consumers to make digital payments using their smartphones. This platform operates via Mexico’s real-time gross settlements payments system, SPEI, making it a secure and efficient option for digital transactions. Learn more about it here.
These alternative payment methods, and dozens more, reflect Mexico's evolving financial landscape. Digitalization, the need for convenience, and catering to the unbanked population play crucial roles in the evolution of these services.
The increasing adoption of these methods indicates a significant shift towards more diverse and flexible payment options in the country, a trend you need to be on top of to ensure your success in Mexico.
If you're ready to get started in Mexico, or you're ready to evolve your existing strategy, remember, we're here to help.