The Next Phase of Digital Payment Adoption in MexicoBy Héctor Cárdenas | Wed, 03/09/2022 - 15:00
The effect the pandemic has had on digital adoption in Mexico and on the overall growth of e-commerce in the country has been constantly emphasized, including in my quarterly contributions to this outlet. Undeniably, the momentum of online sales tools has been promoted by the evolution of a new way of life that requires companies to be available online now more than ever before.
This momentum pushed SMEs — the most prevalent type of business in Mexico — to develop their own websites, to jump onto marketplaces, to integrate shopping alternatives into their pre-existing solutions, to sell through social media channels and to integrate diverse forms of online payment into their platforms.
The Mexican Association of Online Sales (AMVO) determined in a study that, during 2021, six out of 10 small businesses were active in e-commerce. In the same study, the association found that SMEs had doubled their online sales during the first half of the year and expected online channels to remain a main source of revenue during 2022.
This is outstanding progress, considering that Mexico presents an uneven landscape in access to most digital tools due to inequality and infrastructure distribution. Considering this context, as we enter a new way of life, where digital tools coexist with hybrid and (hopefully) more in-person activities, we must ask what comes next in the evolution toward the digital economy.
Smarter Digital Tools for Online Commerce
While every small business is at a different stage of digital transformation, there is a clear difference in how merchants perceive digital tools today, versus two years ago: they are now clearly seen as growth-drivers for businesses.
That is why the need to activate several sales channels and to implement a diversity of payment methods remains a key aspect of online payment strategy. For fintech companies and for organizations in the e-commerce sector, this means catering to the needs of these companies regardless of the stage of adoption that they are in. This translates into:
- Payment methods for every consumer: This means catering to the unbanked population as well as to the growing consumer segments that are adopting digital tools to conduct payments. Every payment method (card, cash for online purchases and bank transfers) increased in use during the past year in varying degrees.
This is a clear sign that more people are adopting the payment methods that are available to them — our sector needs to be ready to onboard new users, seamlessly providing channels where consumers can choose any method to pay where they want, when they want and how they want.
- Payment solutions for every merchant: Every type of small business should have access to every potential consumer out there. This means they should be able to sell, and receive digital payments, regardless of the stage of digital adoption they might be in, even for SMEs that don’t have websites. For example, Conekta’s payment link solution — a link that can be sent through text message so customers can choose a payment method and complete their purchase — increased its adoption up to 250 percent in 2021.
- Just like payment links, other solutions like checkouts, online stores and specialized integration need to be progressively included into e-commerce activity and coexist in order to cater to a diverse customer base.
The Next Phase
We are at a stage when the potential for growth through digital financial tools is outstanding. This applies at all levels: individual businesses, local economies and the overall digital economy. The impact that this new phase of digital financial adoption will have remains to be seen but the untapped potential within the Mexican digital economy is as great as the progress we have made in the past two years. Imagine if all 4 million of the country’s SMEs could sell online and receive online payments. Imagine if every single person with internet access could finalize a payment, no matter what, when or how.
As I have said in the past: The uniqueness of our markets is our strength, and the diversity of our communities should become the inspiration for our strategy. We have the momentum, the talent and the right mindset to turn the inclusion of more people in the digital economy into a key aspect and a turning point for our economies.