When Cash Fights to Stay Relevant


Steve Villegas, VP Partner Management

In today’s payments industry and global marketplace, the term cashless remains a hot topic and buzzword. But how do PSPs and merchants who sell online deal with regions that still remain loyal to bank notes and coins? When selling goods or services online, the limitations of a brick and mortar store don’t exist. Reaching consumers from all over the world is only a few clicks away, and vice versa in that consumers are no longer restricted to where they shop.

Some of us barely remember a time before online shopping, but the reality is that many countries and regions across the globe are catching up and showing unprecedented growth rates in e-commerce. As a U.S. merchant or retailer, the even starker reality is you don’t have to look too far. Mexico, for example, saw just over 34% growth in 2017 for e-commerce. Compare this to the United States, showing 15% growth for the same year. Consumers in Mexico have also caught on that what they want to buy isn’t always in Mexico, with 66% of them shopping cross-border – and 52% of these online consumers are buying goods and services from the United States.

So how do you make sure you’re reaching Mexico’s consumers and taking advantage of such a high growth market so close by? The first step is understanding a region’s culture and preferences. Mexico differs in a lot of ways from more traditional infrastructure and preferences. Understanding that Mexico is a largely unbanked population lays the foundation for how and why consumers shop the way they do. The recent PPRO North America regional report shows that only 35% of residents in Mexico have a bank account, which largely supports the fact that when shopping online 25% of transactions are made using a cash based payment method.

Taking cash online is no easy feat. Payment methods have emerged and become incredibly popular to help facilitate these cash paying consumers. Oxxo is an example of a payment method that uses vouchers and cash transactions to bridge the gap between online retailers and under banked populations – like Mexico. Oxxo at its core is a popular Mexican convenience store, servicing almost 12 million consumers a day at over 16,000 locations. The process is easy for both online sellers and buyers. Customers select Oxxo at checkout for payment, a voucher is generated that can be printed or displayed on a mobile device, this is taken to any Oxxo location and paid for with cash, then payment confirmation is sent to the seller – prompting shipping and the notification of a completed sale.

The importance of Oxxo and cash payment methods cannot be understated as e-commerce continues to create limitless options for a global marketplace. As a whole the world still has many regions sticking to cash, including places like South and Central America where cash payments are 21% of all online transactions and Eastern Europe and the Commonwealth of Independent States where that same figure is 27%. Understanding and meeting consumer needs based on regional and cultural differences is a guaranteed way to capitalize on countries who continue to show staggering e-commerce growth rates.