CoDi to Gain Ground in the Mexican Market

Despite the COVID-19 pandemic, commercial businesses like pharmacies and supermarkets want to adopt CoDi. Though the implementation was cut short because of the crisis, Banxico and the commercial banks in the country expect CoDi to experience a boost in the coming months.

Alejandro Díaz de León, Governor of Banxico, said last Thursday that before the government-led social distancing campaign began, there were 127 SPEI participants that had showed interest in the implementation of CoDi. Díaz de León mentioned that among those were telecom companies, big retailer stores including supermarkets and department stores, transport companies, technology developers and pharmacies. Before the COVID-19 pandemic started, Chedradui had already joined the CoDi ranks alongside Citibanamex.

A few weeks ago, Alejandro Pineda, President of the Payments Commission at ABM, said contactless payments or CoDi payments will become more popular once the pandemic is over. The risk that exists of cash being a COVID-19 transmission method will boost the use of digital payments.

However, their implementation will face a harsh reality in the country. According to INEGI, the COVID-19 pandemic has left 12 million Mexicans without income. INEGI says that the Rate of Economic Participation in the country registered in April 2020 of 47.4 percent meant a 12.3 percent fall from March, which obeys to the important number of people that have lost their job during the pandemic.

According to INEGI, out of these 12 million people impacted, almost 10 million people were working in the informal economy and 2 million people were part of the formal sector. Within the formal sector, the freelance sector has been the most impacted with a 36 percent fall in employment.

Moreover, INEGI reported that in April 2020, the Non-Economically Active Population (PNEA) accounted to 52.5 million while the Economically Active Population (PEA) reached 47.5 million. This is the first time in history that the PNEA is higher than the PEA. However, INEGI estimates that this is the result of the COVID-19 pandemic and the lack of possibilities for people to go out and look for a job.

Moreover, the broad job unemployment rate reached 34 percent, meaning that almost 1 out of 3 workers in the country is available for work. The rate of under-employment also increased from 9.1 to 25.4, meaning that 11 million people are looking for an additional job to cover their basic needs. This is a considerable increase from the 5.9 million people that were in this situation at the end of March 2020.