An Inclusive and Safe Digital Economy Is Our Goal

There is no doubt that the digital economy is now an integral part of our lives and a critical motor of economic growth worldwide, comprising 15.5 percent of the global gross domestic product (GDP). It is also a dynamic economy that has grown 2.5 times faster than global GDP over the last 15 years. What can we do to make sure even more companies and consumers can participate in the digital economy? In Mexico, there are two critical factors that I would like to highlight that could help expand the reach and growth of the digital economy: online security and greater digital and financial inclusion.

In Mexico, these issues are particularly important. The digital economy in Mexico makes up 5.8 percent of the country’s GDP, a percentage that has grown considerably in recent years, and it is ranked No. 1 in Latin America on the list of countries that suffer most from cybercrime. Perhaps even more importantly, the perception of many Mexicans is that it is not safe to buy online. Currently, 31 percent of the population says that they feel unsafe buying online, and with cyberattacks on the rise, this number could very well increase, frustrating the growth of the digital economy.

At Conekta, one way that we have decided to tackle this issue is by helping to protect online credit or debit card payments. In the first quarter of this year, 217 million online purchases were made using credit or debit cards, representing 70 percent of total transactions. We suggest that companies use an antifraud model backed by artificial intelligence to protect online transactions and identify potentially risky transactions, protect the data of cardholders and help reduce chargeback rates.  

To prevent fraud intelligently, we created Fortress, our antifraud engine that has three layers of protection. The first layer allows us to use the data accumulated over the last 10 years of operations while adding individual client transaction history to strengthen fraud prevention capabilities. The second layer takes into consideration factors such as business features as well as the industry or sector to which it belongs  to gather intelligence that also helps us detect potentially fraudulent activity. And lastly, companies can use our tools to make decisions based on their priorities. For example, we recommend that users focus on increasing bank transaction acceptance rates or reducing potential losses due to fraud, depending on their business objectives.

Conekta also offers a solution known as “Gateway,” that has been instrumental in helping businesses accept online credit and debit card payments while maintaining the company's existing bank affiliation to preserve their preferential rates, while also ensuring the highest levels of security. This product can be complemented with Smart Retry, which retries in different affiliations a transaction in order to achieve a higher rate of acceptance, thereby increasing final purchases. 

While no doubt relying on credit and debit cards for online purchases is a global trend, in Mexico, our economy still relies heavily on cash transactions, and it is important to ensure that the 51 percent of the population over the age of 18 who are unbanked can also participate in the digital economy. To some degree, new fintech solutions that are offering credit cards based on criteria that go beyond the traditional banking system methods are also helping to ensure that more Mexicans have access to financial services. 

This financial inclusion supports digital inclusion. That said, according to the National Financial Inclusion Report from Mexico’s National Banking Commission (CNBV), 87 percent of respondents prefer to use cash as their payment method. For this reason, Conekta has also prioritized providing solutions that are made for our market and our customers, allowing them to actively participate as online sellers or customers using technology that allows for cash payment. 

At Conekta, we addressed this need by expanding our cash payment network throughout the country in an alliance with more than 20 convenience stores to reach more than 30,000 points of sale nationally. By doing so, we allow businesses to increase their geographical reach by expanding online payments for customers without credit or debit cards. Further, online purchases paid for in cash are confirmed in real time — a clear benefit for businesses and for customers. 

The success of this network led to the introduction of our second and last cash-related product, known as cash out. We created a refund option that allows customers who bought an online product or service paid with cash to get the money back also in cash in convenience stores when they return a product. This  enhances customer experience and it gives us a new way for Mexicans to be part of the digital economy without the payment method being a limiting factor.

The technology that powers the digital economy is an ally that ensures that more companies and customers can sell and purchase goods and services online. Providing the tools to make it easier and safer for Mexicans to participate in the digital economy is the goal that those of us in the scale-up and startup ecosystem should embrace. Today, Conekta processes 7 percent of the e-commerce transactions in the country and our objective is to continue growing ambitiously by providing the solutions that our clients need to be successful. In doing so, we can create a digital economy that is both safer and more inclusive, boosting the competitiveness of our companies and the Mexican economy as a whole.