90 Percent of Consumer Transactions in Mexico Still Being Paid Using Cash
|To download the analysis, click here (PDF)|
Wasn’t eCommerce supposed to be the death of cash? In Mexico, as it turns out, that hasn’t been the case.
With nearly 90 percent of consumer transactions still being paid using cash, eCommerce merchants like Amazon and Linio are coming up with creative ways to cater to a market where consumers continue to pick cash over cards.
Six months after Amazon’s launch in Mexico, the company began selling gift cards at convenience stores to tap into cash-loving consumers who would rather not pay with their credit or debit cards.
Meanwhile, Linio, the largest eCommerce company in Latin America now lets consumers shop online and then pickup and pay for products in cash at Oxxo stores, the largest c-store chain in Mexico. And Walmart also seems to have adopted a similar strategy. The retailer woos online shoppers without access to credit cards to pay for their purchases at physical store locations.
The payment strategy of these three retailers align with the findings of the new PYMNTS.com Global Cash Index Mexico Analysis. The report reveals that Mexico continues to use more cash than any other country in the Americas. And while the slow but constant growth of alternate forms of payment have contributed to a decline in cash’s growth, cash usage is still projected to grow by 3.1 percent between 2015 and 2020.
Here are some other key takeaways from the report:
As of 2015, cash usage in Mexico as a percent of its gross domestic product (GDP) stood at 26.7 percent.
In the past 10 years, much of the reduction in cash usage in Mexico has come from a decline in over-the-counter (OTC) withdrawals, which decreased from $147.8 billion in 2006 to $132.2 billion in 2015. Meanwhile, use of ATMs for cash withdrawals spiked during the same period.
Mobile payments are projected to make a splash in urban areas. The country has the third highest usage in Latin America.
Read the rest at PYMNTS
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