The changes brought by 2020 were unexpected in many aspects and one of them was a greater adoption of digital tools to solve different activities such as entertainment, studies, and work. Last year eCommerce in Mexico took off with an expected growth of more than 40%. For this reason, the use of cash, so typical of physical commerce, decreased to start making more use of FinTech in this country. Aaron Rodriguez, an expert in the optimization of operations related to eCommerce, provides different points on why FinTech is now having great importance in Mexican businesses.
The changes in digital consumption are largely reflected in the boom of eCommerce for the acquisition of goods and services, even according to estimates by the consulting firm IDC, digital commerce will grow 60% in Mexico this 2021, which represents an acceleration of 3 to 5 years in its evolution.
At the same time, The CIU counted in its latest reports a total of 63 million eCommerce users in Mexico in 2020, equivalent to 74% of the total number of Internet users in the country. This is 13.1% more compared to the second quarter of 2019.
Along with this reality, due to the limitations of going out on the street, the use of cash is being reduced, giving way to technology and digital payments; thus, boosting the growth of the number of FinTech companies operating in this country by 14%, positioning Mexico with the largest number of techno-financial companies in all of Latin America, according to information shared by Hola Cash; a financial application to pay for services virtually and with the possibility of having rewards.
According to the technofinance firm and Rodriguez, the FinTech trend in Mexico is here to stay and online shopping with mobile devices will continue after the pandemic. “Consumers are opting for FinTech to facilitate their electronic transactions. For some years now, we have had in place different alternatives of applications to make mobile or electronic payments, but these were not as widely used by many people,” Rodriguez explains.
Now, according to several reports, due to mobility restrictions and quarantine, there has been a 150% growth in their use, and they are becoming easier to use. “Today, we find that they have a wide range of benefits for users, in many cases more than those given by banks. Among these we can mention rewards, discounts, balance recharges equal to cash, and others; they also allow those who are not banked to have access to digital services, something that was not easy before,” Rodriguez asserts.
In general, with the coronavirus crisis, it has been detailed that the FinTech sector in Mexico had an increase in the use of people of 250%. Rodriguez says, “In 2020 and so far this 2021 just as uncertain, the economic situation of many people was not favorable, with reduced salaries and a large percentage of unemployment that make this period a real challenge for all sectors in the country’s economy.”
But, in the face of the difficulties, many industries reinvented themselves and companies implemented technology to update their labor schemes to telework, to migrate to digital commerce, and to facilitate payments for electricity, water, gas, and other services.
Because of this same situation, the use of FinTech in Mexico increased and, according to Rodríguez, the future of this sector is shaping up favorably thanks to “the fact that users are increasingly looking for the greatest possible benefits such as speed, ease and convenience and even getting something in return.”
The latter is a formula that has worked for the firm because with its app, each transaction generates rewards and these can be leveraged to use in other services within the same platform, something that makes this type of payment solution attractive to Mexican consumers.