A proper preliminary analysis is one of the key aspects of global expansion. Without a doubt preparation to be able to process funds through local payment methods is one of the essential points to the success in the achievement of such a goal.
If you decided to conquer the e-commerce market of Mexico, kindly find this article to be aware of the local payment methods that can be integrated by Solid.
TABLE OF CONTENTS
- Market Overview
- Payment methods
Notwithstanding e-commerce occupies an insignificant part of the whole retail market (only 2.2%), it is clearly seen that the e-commerce market has been growing rapidly since 2017. It was worth an estimated US$31.2 billion in 2019 and is forecasted to grow by at least 20 percent each year till 2023.
Even though Mexico's e-commerce market is still developing, it is noticeable that cross-border online spending is significantly high, almost every second online buyer has made a purchase from abroad (47%).
Credit cards ( Visa, Mastercard, American Express)
Credit cards occupy 40% of all the transactions in Mexico. This method dominates the e-commerce market in this country, but it should be noted that this indicator is much higher in many other markets.
As seen on the chart, Visa penetrates the market with 19% and Mastercard - with 17%. It is also worth mentioning that Mexico has the highest percent (8%) of American Express penetration through all countries in Latin America.
Oxxo is the most popular local payment method in Mexico. It is voucher-based, which means that clients at first shop online, and then to pay off they get a voucher, with which it is possible to pay with cash in any of 13000 Oxxo stores in the country.
The transaction coresponding to the vaucher reamins open 7 days more after the voucher expires.
This hybrid payment system allows users to make electronic payments via a bank, the Internet, or mobile banking. Sistema de Pago Electrónico Interbancaria was developed by the Banco de Mexico and has several advantages for clients and the merchants. It offers real-time online bank transfers, of which the payment can be traced, as the SPEI system works synchronically. Also, this payment method is safe as the network is protected, it is impossible to open a chargeback from the clients' side.
The customer to use SPEI will need a bank account with Internet or mobile banking services and to know the information about the receiver like:
1. Standardized Bank Code (CLABE) for the account (18 digits)
2. The debit card number (16 digits)
3. The cell phone number (10 digits)
At least one of the characteristics from the list would be enough to create a payment by using SPEI.
CoDI is is a digital payment method, which is based on QR codes and NFC technology. By using it customers are able to create a wire transfer from their bank account by scanning the merchant's QR code or using an NFC-enabled terminal and authorizing the payment via their cell phone.
CoDi can be used for any purchase up to a value of MXN8000 (roughly USD380). The transctions are also free of charge.
This payment method also has several benefits:
- It is available 24/7 for customers which have a bank account.
- Transactions occur instantly (within 30 seconds).
- There is no need for customers to have a credit card (all transactions are processed via shopper's phone).
Bancomer is a Mexican cash payment and online banking service.
After selecting goods or services, the consumer reaches the merchant’s checkout site. When selecting Bancomer, consumers have two options:
A) is to pay via online banking by entering the Bancomer details. The payment can then be reviewed and authorized by the consumer, after which the merchant receives a confirmation and the purchase can be delivered.
B) gives consumers the opportunity to pay the amount in cash at a bank branch. Once the payment has been submitted, the merchant receives a confirmation and the purchase can be delivered.
This is a transfer payment method, which is offered by the bank Banorte.
Bank customers log in to their online banking environment. After that they can review the details and authorize the payment, then the funds can be credited directly to the payee’s account.
With this payment, method customers are offered bank transfer payment methods as well as a cash payment method.
While paying with Santander customers needs to log in to their online banking environment, after that clients can review the payment details and authorize the payment. There are also two payment options available:
A) is to pay via Santander online banking. The payment can be reviewed and authorized by the consumer, after which the confirmation is received by the merchant and the purchase can be delivered to the customer.
B) this option gives the customers availability to pay for the purchase in cash at a bank branch. Once the payment has been submitted, the merchant receives the confirmation and the purchase can be delivered.
This payment method operates according to a wallet principle where customers load their electronic wallet account, usually with cash, cards, or alternative local payment types, and then can shop online, buy mobile airtime or pay bills.
Customers can also make and receive QR code payments, as well as those via chat, mail, or social networks.
MercadoPago is designed to facilitate transactions both on and off the MercadoLibre's marketplace by providing a mechanism that allows its users to securely, easily, and promptly send, receive and finance payments online. MercadoPago is accepted by multiple platforms, including MercadoLibre, e-commerce, email, social network, and so on.