Oxxo: Revolutionizing Mexico's Financial Landscape, One Store at a Time
How a convenience store chain is making banking more accessible in Mexico
Financial inclusion is a key factor in promoting economic growth and reducing poverty.
The State of Financial Inclusion in Mexico
Despite being the 11th largest economy in the world, Mexico faces significant disparities when it comes to financial inclusion. Only a third of adults in Mexico had an account at a financial institution just in 2017. Tere figures reveal the considerable gap that needs to be addressed to ensure more equitable access to financial services for all Mexicans.
Oxxo: Mexico's Leading Retailer
Founded in 1977, Oxxo is Mexico's largest convenience store chain, with over 19,000 outlets spread across the country. Initially, Oxxo catered to the consumer's basic needs, offering everyday essentials at affordable prices. They are similar to 7-Eleven stores in the US. They have become ubiquitous in every neighborhood. In recent years, however, the company has expanded its services to include a variety of financial offerings, making it easier for Mexicans to access and participate in the financial sector.
OXXO is making finance easy for people who find banks expensive, inconvenient, intimidating, or all three. The key lies in its broad reach, plus its intimate knowledge of its customers’ preferences and needs. Convenience plus client-centricity, squared.
During my research in Mexico, I met many people who did not believe they were banked but they had their Saldazo card which is a card that is offered by Oxxo in partnership with Citibanamex. People were using this card to make bill payments, asking employers to deposit part or all of their salary into the cards, etc., Without realizing it they were getting banked.
Oxxo's Financial Services: Bridging the Gap
Recognizing the need for greater financial inclusion in Mexico, Oxxo has developed a range of services to facilitate financial transactions for the unbanked population. As a leader in Mexico's retail industry, with over 18,000 stores across the country, Oxxo has utilized its vast network to extend financial services to its customers. By leveraging its wide reach and strong brand presence, Oxxo has introduced several innovative solutions that are helping to bridge the financial inclusion gap in Mexico. These services include:
Bill Payments: Oxxo allows customers to pay utility bills, such as electricity, water, and phone services, at any of its outlets. This service eliminates the need for a bank account and provides a convenient, accessible option for individuals who would otherwise struggle to make these payments. It also saves people hours traveling to a bill pay location and hours more waiting in line. Oxxo stores are in almost every neighborhood and people can make a bill payment while buying a soda.
Mobile Top-Ups: With mobile phones being a primary means of communication in Mexico, Oxxo provides mobile top-up services, enabling customers to recharge their prepaid mobile plans without requiring a bank account or credit card.
Remittance Services: In partnership with major remittance companies, Oxxo offers money transfer services to its customers. This allows individuals without access to traditional banking to send and receive money both domestically and internationally. More than $58B was sent to Mexico as remittances. Now Mexican receivers can simply go to a local Oxxo store to receive their remittance.
Prepaid Cards: Oxxo has partnered with several banks to issue prepaid debit cards. These cards can be loaded with cash at any Oxxo store and used for purchases, bill payments, and even ATM withdrawals. This provides the unbanked population with a safe, reliable alternative to cash transactions. One of the most popular such cards is the Saldazo card. In collaboration with Banamex and Visa, Oxxo launched the Saldazo debit card in 2012. This low-cost, accessible financial product allows users to make purchases, pay bills, and receive deposits without having to open a traditional bank account. Many Mexican people don’t believe they have any financial services but yet they carry these cards in their wallets. They simply think these are Oxxo or Saldazo cards.
Oxxo Wallet: In 2021, Oxxo launched its digital wallet, called Spin, allowing customers to open an account, transfer money, pay bills, and make purchases at participating stores without the need for a traditional bank account. This initiative has provided millions of unbanked Mexicans with an easy-to-use platform to access essential financial services, promoting savings and fostering financial security.
Oxxo's commitment to financial inclusion in Mexico has had a considerable impact on the lives of millions of unbanked and underbanked Mexicans. Through its innovative solutions and strategic partnerships, the company is effectively bridging the gap between formal financial services and those who have been historically excluded. By leveraging its extensive retail network, Oxxo is not only driving financial inclusion but also contributing to the country's overall economic growth and social welfare.
Resources:
CGAP publication here
Money article titled “Oxxo wants to become a superbank”
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