The winner in first place is the consumer who has many more options, from digital native products to a more traditional format,” he highlighted in an interview as part of the 88th Banking Convention. Visa data reveals that in Mexico, the penetration of contactless payment transactions rose from 2 percent to over 15 percent in approximately 18 months; however, there is still a long way to go considering that in Latin America and the Caribbean, the use of this technology is already at 70 percent, but in Peru or Chile it exceeds 90 percent.
Urban transportation is one of the cases that helps the adoption and use of contactless technology, in addition to being the most valued by consumers. The market is at an inflection point, and moving forward, this trend will gain more strength, assured Francisco Valdivia, general director of Visa Mexico. His experience in other markets gives him the vision that in Mexico there are conditions that lead to an acceleration of penetration and development of digital payments, but for this to happen, the industry must be solid, with investments from all participants.
“I pleasantly see, for example, the relevance that non-bank acquirers, payment aggregators have today. We see in Mexico a market that has a lot of potential,” he emphasized. In light of the entry of new participants into the banking system with a 100 percent digital origin, Francisco Valdivia stated that it is a very positive trend for the country, as there is plenty of room to strengthen actions to bank and include more Mexicans in the formal financial system.
“A part of the conditions I see for this market towards the future is that both new entrants, so to speak, and players who have been around longer, both have a vision of developing, deepening, and increasingly digitizing,” he reiterated. This is not a coincidence: the study “Discovering the Benefits of Digital Payments for Micro and Small Enterprises: Perspectives from Mexico” indicated that there is a 20 percent average increase in monthly income for a microenterprise.
In addition to helping small businesses accept digital payments, they provide initiatives in collaboration with the entire industry to contribute to their growth and sustainability through educational resources and support programs, among other aspects. Given all this progress and projections for the country, the executive of the payment processor emphasized that their main contribution to the development of Mexico is to be at the center of commerce through their global scale technology, the reliability of the business, the speed, and the security they provide to users.
Therefore, they see that the combination of the scale and reach of their network alongside their proven strategy and expanding markets like Mexico provides them with a pathway for sustained growth. “These are the different dimensions with which we accompany markets, and Mexico is by no means the exception. The use of cash as the main form of payment among Mexicans is gradually yielding to digital transactions.
So we see that it will continue on that path forward and increasingly become preferred by consumers,” pointed out Valdivia. At the same time, the Visa Maturity Index demonstrated that there is 25 percent of municipalities between an advanced level and transition in the adoption of digital payments. Since its implementation in the Metrobús of Mexico City, over 30 million total transactions are estimated.
“When we look at this globally and in other markets, we find that at these levels is where these technologies really take off. Approximately 70 percent of the total established businesses are at these levels, of which three out of ten have a Point of Sale (POS) terminal in advanced locations. These analyses allow them to detect that there is a great opportunity to develop and strengthen the adoption of payment methods in the country, especially in transition municipalities, where a high percentage of the population is concentrated, at 43.5 percent, and have urban characteristics and infrastructure that enable better adoption of POS terminals as well as financial inclusion.
This progress is related to the fact that businesses have also set aside caution and are encouraged to offer other types of payment services. There is a more developed offer and competition. We have plans in various verticals, with a very busy and quite transversal agenda.
