100,000 Users Just the Beginning for Ualá in MexicoBy Andrea Villar | Tue, 05/11/2021 - 05:00
Q: Ualá recently hit 100,000 users in Mexico. What were the main factors that contributed to this result?
A: There were three main factors. The first was the great need for banking penetration in Mexico. Currently, 53 percent of Mexicans have never had a financial product and that is a huge opportunity. Remarkably, 75 percent of all Mexicans have a smartphone and nine out of 10 have an internet connection. While more than half of the country is outside the financial system, more than 70 percent is connected to the internet. This is the perfect breeding ground for a product like Ualá, which is 100 percent free and has no small print and no commissions, to capture a large percentage of this market very quickly and with exponential growth.
The second factor is that there is great technology acceptance in Mexico. All applications that engage consumers with a good interface enjoy a great reception. We listen to our customers and take advantage of the way they already consume content from streaming platforms to provide them an experience that is just as intuitive. We allow clients to access their financial life from an app connected to a Mastercard card, which allows them to pay anywhere such cards are accepted.
The last factor is Ualá's value proposition. We brought to the Mexican market a value proposition that matched this great opportunity of Mexicans who already had a smartphone and an internet connection. We gave them a value proposition tailored to their needs. The first thing we saw in the market was that clients needed locations where they could make a deposit free of charge. Before our arrival, many people were tied to cash. Today, they have an alternative to be able to grow their financial situation, improve their personal finances and their lives. Consumers were required to pay a fee when making any kind of deposit at convenience stores. With Ualá, that is over. We are pioneers in offering a strategy and a value proposition that is commission-free.
We have more than 14,100 sites throughout Mexico where users can make a deposit and we refund the fee charged by the shop. This removes the hurdles. I think this is very important when fostering financial inclusion. If you really want users to be included in a system where cash is predominant, you have to give them mechanisms without any kind of barrier so they can access it. We give them the ability to make payments to their prepaid line without intermediaries or fees. There are more than 105 million prepaid lines in Mexico and that shows the large number of people who need this to change. Ualá was launched in September 2020, at a time when the country was under lockdown. In that context, we sought to give our users the possibility to pay for more than 60 different types of services within the app or recharge any type of phone line through our recharge service at no cost. In the end, having a 100 percent free proposition allowed us to access a large percentage of the market rapidly. Today, we have more than 100,000 users and we will probably increase that number fivefold in the short term.
Q: What is Ualá's strategy to engage users so they do not quit the app after using it a couple of times?
A: Unlike many other players in the market, we do not receive commissions, not even for SPEI deposits or transfers. Ualá has a comprehensive value proposition that is much more competitive than others. On top of that, we give the user the ability to make any type of payment from the app and to find places around the country to make withdrawals. We are connecting people who were previously isolated, probably because they were in one of those 479 municipalities that have no financial infrastructure. They did not even have a bank branch to be able to open a bank account. The fact that someone does not need a branch to open an account and can do it in less than 5 minutes is what allows people to use our product on a regular basis. Moreover, we strive to offer promotions at different shops. This creates a very strong incentive to consume and makes users feel that their experience is better than that of any traditional banking product. Unlike many traditional banks, we do not require a minimum balance and we offer a very large portfolio of promotions.
Q: How will Ualá maintain good customer service as the number of users grows?
A: Unlike many other players in the market that may be starting from scratch, we bring a great deal of expertise from Argentina, where in less than three years we reached more than 2 million customers. Maintaining that number of customers is a challenge and allowed us to adjust and grow in a way that guaranteed scalability. It also ensured customers enjoyed a very high level of service. Today, we have the infrastructure and team to scale to millions of customers without any inconvenience and guaranteeing a premium level of customer service. We have a chat where there is a human behind it and not a chatbot. A person understands the problem and knows what the quickest solution is. For us, the customer has always been at the heart of our strategy. Our customer service team is one of the largest and most highly trained. At Ualá, our policy is that all our employees experience the customer service channel and have direct contact with the customer to understand their needs.
Q: What other good practices from Argentina are you replicating in Mexico?
A: In countries like Argentina or Mexico where more than half of the population has never had access to the financial system, access is largely conditioned by the level of financial education clients have. In Mexico, less than 12 percent of people who have a bank account have any kind of financial education. This can lead to massive use of cash. In Mexico, we have a blog from where we regularly publish educational content. This allows us to offer the best product and also to accompany it with financial education. Another important aspect is to listen to the feedback from our users. We see that very few companies in the market make the effort to make a product tailored to their needs.
Q: Do you have a strategy to bank vulnerable groups such as women?
A: Today, more than 30 percent of Ualá's customers are women. Our product was largely built by a multidisciplinary team with more than 12 different nationalities and with a 44 percent rate of female participation. It is a product built, at a significant rate, by women and intended to reach women. We not only seek to provide them with financial education but also with freedom through the good use of their financial resources. Financial education is the core of our strategy and we seek to communicate this every day through our social media. This has allowed us to reach more than 30,000 women who are now part of Ualá.
Ualá is an Argentine technology company that offers a prepaid Mastercard for digital financial transactions. The company, founded in 2017, arrived in the Mexican market in 2020 and it has already issued more than 100,000 cards.