E-commerce Accounts for 45% of Global Spending: Mastercard

The years following the pandemic have accelerated the digitalization of many processes, particularly within the financial sector. Jorn Lambert, DCO, MasterCard, revealed during the Fintech Mexico Forum that 45% of global spending now occurs in e-commerce, and 65% of all physical payments are contactless. 

“In 2024, digitalization is the default,” said Felipe Vallejo, President, Fintech Mexico. However, in the payment sector, the transaction itself is not the primary driver of digitalization. The driver is what people want to buy or experience through the digital channels, noted Lambert, prompting platforms to adapt to new business models.

One persistent challenge of digitalization in Mexico is the prevalence of cash. Ryan Croft, Co-founder, Pacto, notes that over 71% of point-of-sale (POS) transactions in Mexico still use cash. Despite this, progress has been made due to factors such as increased electronic payment usage, expanded availability of mobile wallets, regulatory mandates for low-cost bank accounts, and heightened awareness of cybercrime risks associated with cashless payment methods.

“Mexico presents an enormous opportunity because there is still so much to be done. We have to rethink Mexico not as a country that is behind but as a country where there is a lot of opportunity to create and innovate,” said Lambert. 

Another challenge highlighted at the conference is the under-identification of the Mexican population. José Antonio Meade, Senior Consultant, EMANT and former Minister of Finance, emphasized that without proper identification documents, like passports or a voting ID, people are not able to access financial services, traditional or digital. “We were surprised the fact we unable to see how relevant it would be for the development of the population (during my time in office) to link digital identification and the construction of a digital environment in terms of how much that would change not just financial inclusion but social inclusion,” he said. “There was a lack of imagination regarding digital finance.”

Experts at the conference underestimated the impact of digital transformation on people’s lives. Access to digital services, facilitated by smartphones, makes credit access easier and allows individuals to transition from cash to electronic payments, opening the door to better economic opportunities. 

However, this transformation brings challenges, including the need to adapt business models and protect consumer interests. “There are going to be dramatic changes that will create companies and destroy others. We need to anticipate the future business models and make sure that once again we embed our solution to what the consumer wants,” said Lambert.