Building a Collaborative Ecosystem for Mexico's Digital Future
Global economic challenges change daily, generating a constant impression of global volatility. Challenges such as inflation, a possible global recession, the e-commerce boom and the movement to increase financial inclusion have encouraged industry leaders to search for new opportunities to keep growing sustainably. Many of these leaders met at Conekta’s “How to boost Mexico’s digital economy?” event to discuss the growth of the digital economy, e-commerce and other opportunities brought about by the digital payment ecosystem.
E-commerce had a substantial boost in the wake of the pandemic. The challenge has now become to “create competitiveness for businesses to be resilient in the current scenario where the return of a balance between the physical and digital is very present and on-demand by users,” says Hector Cardenas, CEO and co-founder, Conekta. Many opportunities have emerged in the wake of the digital economy and e-commerce boom, but so have challenges.
The industry’s main challenges include fraud, the need to have data to pre-qualify and avoid payment rejection and the need for companies to provide multi-acquiring options, says Héctor Pavón, Country Manager, VTEX Mexico. Fraud is a key pain point in e-commerce and Mexico continues to be one of the countries with the highest rate of fraud in Latin America, adds Pamela Ceballos, Senior Director of Digital Partnerships, Fintech and Ventures, Visa Latin America.
Having the right tools in the value chains increases acceptance rates, says Ceballos. According to the Citizen Council for Security and Justice, 67% of the reports of phishing fraud correspond to the impersonation of banking entities, 14% of e-commerce sites and 8% of airlines. Another part corresponds to the impersonation of government institutions.
Since the pandemic, the need to generate greater financial inclusion has increased, both in terms of capital and finance. “The issue of financial inclusion is key. We offer solutions to customers who previously did not have access to credit products to be able to buy online. It is a multiplier effect because you are really broadening the base to grow the digital economy,” says Miguel Ludlow, Product Leader, Nu Mexico.
However, many Mexicans still face many barriers to access basic financial services. The Association of Banks of Mexico (ABM) reports that in 2021, 53% of adults lacked a bank account and seven out of every 10 Mexicans still lacked access to credit. Therefore, banking has a unique opportunity to use technology to access to financial products to those with geographic, economic and social limitations, thus integrating them into the system. Although the use of cash is still the preferred payment method of many Mexicans, digital payments have gained ground in the past two years. The use of virtual and physical cards is expected to grow as long as user security is guaranteed.