Latin America is a very multicultural region. Each country is a world, with very different customs among them. Purchasing habits and means of payment are no exception, because although there are countries where cash reigns, in others wallets or digital methods are gaining strength.

We want to talk about all this together with Americas Market Intelligence (AMI), with whom we have collected information from each country in the region. Today, we will tell you about one of the largest markets in LATAM: Mexico.

The e-commerce giant

With a population of 130 million inhabitants and a GDP of US $1,293 million, Mexico is the second largest economy in Latin America. One of the factors that make the difference in its GDP is the remittances that are sent from the United States to that country: they have a year-on-year growth of approximately 27% and are the third largest recipient of remittances worldwide.

Although it is a country that years ago already represented an interesting market for e-commerce, the closures caused by COVID-19 accelerated this exponentially. The volume of electronic commerce in that country reached US $49 BN at the end of 2021. One point to consider is the growing internet penetration rates (72%) and smartphones (69%) in Mexico.

The opportunity for fintech companies

Despite its size, Mexico is one of the countries where cash continues to rule the roost and an essential part of the population is underbanked. Almost half of the population does not have a bank account, so financial inclusion is a constant theme.

It is for this reason that fintech companies in Mexico have experienced a boom, offering financial, banking, or payment services to the entire population that is currently not served.

Paytechs like Kushki, which are a segment within fintech, bring digital payments closer to people by offering payments with cards, transfers, and often in cash, facilitating the adoption of these payment methods. This last point is very relevant in Mexico because almost 10% of the total volume of e-commerce in that country is paid with cash at face-to-face payment points.

Also, the country has a tremendous number of companies of this type due to its regulation: Mexico has been one of the pioneers in having a Fintech Law to regulate financial technology institutions since 2018. The companies are directly supervised by the Central Bank of Mexico and the National Banking and Securities Commission (CNBV).

If you want to know more about the different markets in the region and their behavior at the level of e-commerce and payments, subscribe to our blog and wait for the next deliveries with Americas Market Intelligence.