More than half of the Mexican population is still outside the financial system; this represents a good opportunity for payment technology companies such as Mastercard and Visa. Digital solutions are increasing their coverage, with lower cost, greater convenience and a good user experience. For this reason, the industry is optimistic for 2023. The country has made progress in the creation of infrastructure: the penetration of the Internet, electronic commerce and point-of-sale terminals are advancing, and the great global trends in innovation and technology are present. in Mexico.
Year of innovation and consolidation
Mauricio Schwartzmann, CEO of Mastercard Mexico, tells about the company’s plans and challenges in the payment ecosystem.
AN: Mauricio, how do you see 2023 for payment technology companies, such as Mastercard?
Many things happened with the pandemic: digital transformation, innovations in payment methods, digitization of the economy, entry of new players, such as Nu and Stori. All these changes will generate accommodations or consolidations in the market, so 2023 will be a year of consolidation and innovation. We are going to see a lot of new technology entering the payment industry space.
AN: What plans does Mastercard have?
This year will be key to our plans. For years, all card payments in the Mexican market have run on domestic infrastructure; that is, the banks’ clearinghouses. We launched ours this year and we hope that 2023 will be the time for this new value proposition to take off or consolidate in the market. This new infrastructure will give us independence from the domestic infrastructure. A) Yes, Any Mastercard innovation that exists anywhere in the world can be brought to Mexico and activated with a simple switch.
Before, when we wanted to implement something new, we had to convince the entire industry and that meant that much of the technology available to our users around the world took a long time to reach Mexico. For example, contactless payments, which have accelerated rapidly around the world, still don’t work in Mexico. We are now very excited to be able to bring technology that is already working successfully globally.
A second theme that the market will see from Mastercard is many launches. In this environment of innovation and digitization, we are strategic partners of any player who wants to enter this space: fintechs, banks, retailers, governments… We are all very excited to innovate and launch new value propositions to enter and compete in the market, and we are preparing products and value propositions.
In third place, there’s our Arcus acquisitionwhich will give us the ability to process payments to service providers and other applications, in real time.
We are no longer just a company that offers card solutions, but in interbank electronic payments and service payments. Next year there will also be open banking issues, which will allow secure interoperability in the industry. In addition, the regulation begins to unravel and that will open spaces.
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AN: What are the challenges?
In Mexico, the payments industry is a bit fragmentedso the challenge is to achieve a good consensus so that we all align ourselves towards the same objective.
In the case of contactless payments, for example, which merchants, acquirers, the regulator, banks and payment technology companies let’s work hand in hand to make it happen.
The second challenge is that the technologies and innovation that we want to incorporate require a certain level of regulation. So, we want to accompany the regulators so that the pending laws are soon ready. Mexico was very innovative in 2018, when the fintech law was issued, but years have passed and there are still pending issues. Having a good regulatory framework will encourage investment and make the field more even for all players.
The third is that many of the new players are in trouble; in fact, many have cut staff, because between inflation, the cryptowinter and the economic situation investment funds are being more careful with the projects in which they invest. Consequently, some players are going to consolidate, others are going to cool down and some more are going to disappear. This will cause their innovation and growth to slow down a bit and the market to rearrange.
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