Financial Inclusion Set to Grow with Tokenization, Biometrics

The financial services sector is evolving, driven by advancements in technology that emphasize seamless, secure, and scalable payment solutions. Fintech companies, neobanks, and traditional institutions are adopting innovations like tokenization, blockchain, and no-code platforms, paving the way for enhanced global financial inclusion and collaboration.

Digitalization aims to reduce reliance on cash and physical credit and debit cards by addressing inefficiencies, boosting security, and empowering businesses and individuals. By leveraging technologies such as blockchain, tokenization, and low- to no-code systems, financial players are integrating innovative solutions into existing systems, improving operations from payment reconciliation to secure digital transactions.

Despite being the 12th largest economy globally, Mexico remains heavily reliant on cash. As Filiberto Castro, Founder and Co-CEO, Aviva, explained to MBN: “Only about 30% of Mexico's population has access to formal credit, leaving between 70 million and 75 million Mexicans without credit history or access to financial products.” Access to formal credit stood at just 36.6% in 2022.

Mobile technology offers a bridge for the unbanked population, leveraging high smartphone penetration. “The smartphone is the initial step to bring customers into the financial system,” said Priscila Barrantes, Country Manager, PayJoy, in an interview with MBN. In 2020, Mexico had nearly 81 million smartphone users. According to Statista, smartphone penetration is projected to grow by 24.5 percentage points from 2024 to 2029, reaching 97% by 2029, marking 15 consecutive years of growth.

Security and transparency remain key barriers for consumers hesitant to adopt digital financial services. Tokenization offers a solution by replacing sensitive payment data with secure digital substitutes. “Tokenization transforms sensitive payment data into secure digital representations, ensuring fraud prevention and enabling a smooth customer experience,” a Mea Wallet representative told MBN. “Think of it as exchanging cash for casino chips — a secure substitute.”

Tokenization, combined with APIs, enables easy integration with digital wallets and platforms like Apple Pay, Google Pay, Visa, and Mastercard. For instance, Mastercard recently announced plans to make all transactions in its ecosystem fully biometric by 2030. “By protecting sensitive data through encryption and tokenization, we are building a global economy that empowers consumers and supports merchants while reducing fraud,” said Jorn Lambert, Chief Product Officer, Mastercard.

Despite technological advancements, consumer education remains critical. “Financial and digital education for consumers on the use of technological tools is key to enhancing their financial experience,” said Alejandro del Río, Regional Director, Paymentology, in an interview with MBN.

For underserved populations, improved infrastructure and access points are equally important. “Various elements need to come together — a government with clear policies to encourage the use of digital money,” said Castro. “The country also needs more education and better infrastructure, bringing access points closer to people who do not have them.”