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This post is also available in: esEspañol (Spanish)

Banxico rolls out CoDi pilot for cashless QR and NFC payments

This post is also available in: esEspañol (Spanish)

Contxto – After months of anticipation, Mexico’s national bank (Banxico) finally launched the Cobro Digital (CoDi) pilot program on April 29. Authorities invited six Mexican corporations to participate in the electronic payment trial while only two partners have officially started.

All of the invitees are financial institutions and they include BBVA Bancomer, Citibanamex, Santander, Banorte, Banregio, as well as Fincomún. Only employees from these organizations will participate, according to reports. They will be responsible for analyzing the behavior of the QR code and NFC technology.

In Summary

For the time being, this means that the alternative payment system still won’t be publicized or available to the public. The goal of the CoDi payment system is to someday allow consumers to purchase goods or services via their mobile phone. All they will have to do is simply scan a QR code to process payments at commercial banks and financial entities.

So far, only two out of the six partners formalized operations for the pilot that is expected to last until September. The remaining should begin testing the waters in the following weeks. Four of the collaborators are credit institutions while all six are part of federally regulated banks.

In-Depth

Governmental authorities aspire to make wireless payments a new national banking standard. From the sounds of it, it appears as though a greater adoption of CoDi and its QR technology will lessen the country’s dependency on cash as well as debit or credit cards.

“CoDi will be a mandatory payment system for all banks in the financial system,” said Gerardo Esquivel, deputy governor of Banxico, who hopes the initiative warrants financial inclusion among the population. “It will have a few months of evaluation and learning for its full implementation at a national level.”

In the end, the public will still be a little clueless about CoDi for another few months. Until then, Banxico plans to make technical improvements based on the outcomes of the preliminary run. Public services may debut by the end of the year if everything goes smoothly.

“It depends on how employees develop the tests,” said Miguel Diaz, director of Payment Systems at Banxico. “The work is underway. The financial institutions and the Bank of Mexico are working to make this a reality in the short term.”

Apparently, Banxico didn’t invite telecommunication to participate since the payment software requires cellphones. Besides needing a bank account to transfer or receive funds, users also need a mobile device with data.

The federal government intends to expand cell coverage to avoid complications with this, said reports.

There won’t be any commissions for CoDi transactions worth less than MXD$8 thousand, either. This is an attempt to promote more financial inclusion among prospective bankers and commercial partners.

Conclusion

As of today, this pursuit remains under the radar for most Mexicans. If financial inclusion and financial security are Banxico’s ultimate goals, then there remains much to be desired. Not only are people unaware of CoDi but large swaths of the population don’t even have access to standard banking services.

If bank accounts are mandatory, not to mention cell phones, then executives must ensure that potential patrons can easily access these tools. Otherwise, all of Banxico’s hard work may go by the wayside. Additionally, unbanked customers may find more support with Mexican competitors like albo, Flux, and Fondeadora.

Another huge concern for Banxico should be Mexico’s dependency on cash. That’s to say, many vendors prefer physical money over paying steep fees for debit or credit card transactions.

According to data from the National Survey of Financial Inclusion, 80 percent of business transactions in Mexico are cash. Moreover, only 47 percent of adults between 18 and 70 years old have a bank account.

While it’s beneficial that Banxico offers zero commission for small transfers, how companies will embrace alternative banking is still unknown. Since we’re still not sure how this will affect the general public, we’ll be sure to keep you in the loop.

-JA

Jacob Atkins
Jacob Atkins is a journalist specializing in Latin America. He studied journalism and international relations at American University in Washington, D.C. and has previously reported from Chile, Ecuador, Haiti and Mexico. When he isn't writing he's most likely hiking or drawing.

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