Market Trends of Mexico Real Time Payments Industry
This section covers the major market trends shaping the Mexico Real Time Payment Market according to our research experts:
P2B Segment is expected to witness strong growth
- Mexico's finance minister noted that financial inclusion is one of the biggest obstacles in the government's fight against poverty, inequality, and slow economic growth. Hence, the administration is seeking to encourage competition among public and private enterprises to lower bank product costs for low-income individuals. It also seeks to develop a sustainable technological infrastructure to enhance the country's real time payments network.
- The country also witnessed significant investments amid the growing demand in the market. For instance, in June 2021, Clip, Mexico's leading digital payments and commerce platform, announced to have received a USD 250 million capital investment by the SoftBank Latin America Fund and Viking Global Investors LP. The investment is the highest fund received by the company in Mexico and establishes Clip as the first payments Unicorn in the 12th largest economy in the world, with a valuation approaching USD 2 billion.
- These developments also increased the number of strategic activities in the country. In November 2021, Whale Cloud, a leading technology company providing software solutions and services for telecommunications and multiple other industries, partnered with Toka Fintech, a Mexican-leading financial group, to develop its own digital payment app with Alipay+ Digital Wallet Solution, providing Mexicans with better access to inclusive financial services.
- This system intends to offer Mexicans more options to carry out payment transactions in the country. It aims to foster competition amongst payment service providers, an industry that has boomed in the past year by providing different intermediary and digital solutions for credit card and digital payments. This digital payment option would accelerate the change to a cashless ecosystem or cashless economy, one of the objectives of the current government.
- According to the mobile payments company, Boku Inc, number of users of mobile wallets in Mexico is estimated to grow from 27.60 million in 2020 to 74.60 million by 2025. This significantly increases the P2B payments and is expected to drive the overall market.
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Retail Segment is Expected to Hold a Significant Market Share
- Mexico stands out as one of the key markets and is doing so through sustained evolution and slow but steady growth in many dimensions. The retail and consumer sector is one industry that has the potential to exceed Mexico's average national future growth. This will be driven by a combination of economic and socio-demographic trends, offerings, and business models to appeal to Mexican consumers.
- The number of cashless transactions in the Latin American region is forecasted to increase by leaps and bounds influencing the cash displacement in Mexico. Mexico is one of the fastest-growing markets for real time payments in the region and the increase in digital transactions is expected to drive the market forward.
- The growing demand for real time payments in the retail sector is urging companies in the country to indulge in various strategic activities. For instance, in November 2021, Mastercard announced the acquisition of the Start Path program alum Arcus FI to assist with bill pay solution delivery over real-time payment applications in Latin America. The acquisition has further helped the company to enable payment processing, settlement, and reconciliation through Mexico's real-time Interbank Electronic Payment System.
- Peer-to-peer (P2P) and consumer-to-business (C2B) transactions answer for the major part of the current volume of real-time payments in the country, according to ACI Worldwide. The development of e-commerce is also expected to accelerate instant payments in the country, thus dominating the overall market.
