Digital payment culture takes root in Mexico
The use of coins and banknotes is not free. Shops have to hire guards to transport them and the employee has to wait in line for hours to deposit in the bank. One idea, the cost of cash, has focused the second edition of the No Money forum, organized this Wednesday by EL PAÍS in the BBVA Tower in Mexico City. The event brought together businesses and civil society to discuss the transition to digital payments, with benefits ranging from fighting corruption to improving productivity.
"A headache". This is how the president of the Association of Banks of Mexico, Luis Niño de Rivera, defined cash. "From the Central Bank that produces it, to the commercial bank that protects it makes us more efficient," he said of the advantages of electronic transactions. In the same vein, the president of the Business Coordinating Council (CCE), Carlos Salazar Lomelín, has given the example of the corner store that has to be constantly handling bills and coins, at the cost of a loss of productivity. "Whenever we have improved the transactional capacity of society, trade and economic activity have increased," he said during a conversation with the director of EL PAÍS AMÉRICA, Javier Moreno.
In a country where only 4% of transactions are done digitally according to sector figures, financial institutions are convinced of the benefits of attracting the segment of the population that still pays mainly in cash. One of the latest initiatives comes from the Bank of Mexico. The entity has just launched CoDi, a mobile payment platform that uses QR codes.
The more than 70 million smartphones operating in the territory are a fundamental ally. In five years, BBVA has gone from having one million customers who use digital media as the main method of interaction to more than eight, says its director general of business development, Hugo Nájera. A boom that has also been noted in e-commerce. Purchases in this field have increased by 40% this year, a figure referred to by the director of Visa in Mexico, Luz Adriana Ramírez, to defend the country's potential. "Mexico is still very focused on cash, but it is a very favorable terrain," she said.
The benefits go beyond increases in productivity and reduced operating costs. Electronic payments can have positive effects on the fight against corruption and tax evasion, which is estimated at 500 billion pesos annually. "Between 60 and 70% of the revenues of the Mexican states are exclusively paid in cash. It is not clear how much is collected and how it is spent," said Ricardo Alvarado, a researcher with the Mexican NGO Against Corruption. Leaving a fingerprint allows, according to Alvarado, "reinforcing the exercise of accountability.
Despite the advantages of the digital transition, there are still many challenges ahead. The informal sector employs around 60% of Mexican workers, many of them without a bank account and with little incentive to formalize. "A company has to comply with 145 regulations in the state where we have fewer regulations," said Salazar Lomelín, before calling on the authorities to simplify procedures.
In addition to the regulatory framework, there is a need to increase the population's confidence in digital through greater protection. Improvements in cybersecurity that, in turn, pose the challenge of not hindering user comfort. Instead of building walls around the customer, Hugo Nájera of BBVA has opted to use technologies that make controls less cumbersome for users and more difficult for fraudsters to supplant identities. "We are investing not only in identifying consumer behavior, but also in trying to contextualize the financial operation," he said.
These efforts are strengthening the transition to digital payments. Three years ago, Carlos Salazar Lomelín, of the CCE, presented his consolidation: "Just as it seems normal to us today to bring a wallet in the stock market with the bills, I am convinced that in a relatively short period of time it is normal for us to forget the wallet.