Electronic Payments Gain Strength as Sector EvolvesWed, 03/07/2018 - 10:21
Q: How is STP inserting itself into the fintech ecosystem in Mexico?
A: STP is an Interbank Electronic Payment System (SPEI) participant with 10 years in the large-value payments (LVP) system, performing electronic transfers on behalf of our clients to banks, brokerage houses and any other player connected to SPEI. Although we provide our services to any type of business, we are an important partner for the fintech industry thanks to our leadership in providing hi-tech and expertise solutions, including real-time connection (API-Fintech), advisory as independent consultants, multivariable technological integration with any platform, language and technology support and automatization of income and expenses of both investors and applicants of Collective Financing Institutions and Electronic Payment Fund Institutions in a 24/7 window.
STP allows fintech companies to identify Mexican tax ID numbers (RFC) and the beneficiaries’ name, which allows them to reinforce their KYC procedures through the technological authentication of the Electronic Proof of Payment (CEP).
Q: What advantages does STP’s electronic payments system offer over that of banks?
A: Banks set an upper limit for electronic transactions of MX$8,000 (US$437) after 5pm or on Saturdays, Sundays and bank holidays. The reason for this is that banks use their clients’ money to originate loans. Since we are not in that kind of business, our clients’ money is always available and ready to be disbursed 24/7 without any amount restriction and secured by financial guarantees established by SPEI rules.
The key competitive advantage offered by STP over traditional banks’ payment platforms is that we are integrated technologically into our clients’ systems (H2H-ERP) through algorithms and webservices that deliver encrypted messages on each transaction. This allows payments and collections to be made in real time from to STP to any bank account, debit card or mobile account in seconds.
Q: How is the Mexican electronic payments system evolving and how is this translating into benefits for users?
A: New services are appearing that we believe will transform the banking industry as a whole. Starting on April 30, 2018, banks are required to provide a CLABE account for each financial product their clients have. This is facilitating interbank payments and allowing clients to change or switch banks and perform SPEI payments 24/7 for all their accounts payable, loans, mortgages and leasing products. This will increase the amount of SPEI payments in the near future, which at the end of the day will change the way payments are understood. Also, Banxico has unveiled a functionality called “COBRO SPEI,” which is similar to the US banks’ ACH service, that all banks will be forced to add to their app so their clients can approve or reject automated charges from other participants. This will radically transform collection services.
Q: SPEI has been operating in the market for several years. What will it take for it to become a mass consumption service?
A: Although the number of people using the banking system still is not very high, electronic payments are growing rapidly. What we need now is for cell phones to become a payment tool. Banxico is working on new regulations that will allow this change. There is a reason for this: all transactions done via SPEI are transparent and can be traced. These can also help reduce the use of cash and payments via credit cards, reducing costs.
The rise in electronic payments can be seen in workers’ remittances. In 2017, almost 90 percent of remittances were made in cash and only 10 percent were done electronically to bank accounts but the trend is shifting. STP’s goal is to process electronic remittances to CLABE, debit card or mobile accounts.