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eCommerce Explorer: Mexico Payments Guide

eCommerce Explorer: Mexico Payments Guide
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  • eCommerce Explorer: Mexico Payments Guide
Post Series: eCommerce Explorer: People and Payments

In Mexico, government programs are improving internet connectivity, driving the adoption of digital payment methods and growing smartphone use at the fastest pace in Latin America. While buying habits are shifting quickly, payment preferences are slower to change.

A considerable percentage of the population is still unbanked. To maximize Mexico’s ecommerce potential, companies need to offer a mix of payment options that can appeal to both shoppers who use cards and wallets as well as those that rely on cash for digital payments.

Mexico at a Glance

  • Population: 126 million1
  • GDP per capita: US$9,673.402
  • eCommerce market value: US$22.6 billion3
  • Mobile commerce market value: US$7.7 billion3
  • % of population using the internet: 65.8%4
  • % of adults with a smartphone: 52%5
  • % of population with bank accounts: 37%4
  • % of population with credit cards: 10%4

eCommerce Trends in Mexico

Companies designing shopping and payment experiences for Mexican ecommerce shoppers will need to be mindful of local customs and preferences.

Create Seamless Experiences Across Mobile and Desktop

Mexicans are fans of mobile social media, spending nearly four hours a day on sites like Facebook, Twitter, Tumblr, and Pinterest3. However, they still complete most of their online purchases via desktop computers. That means companies will need to design compelling, seamless user experiences for both mobile and desktop, and understand that users buying journey may take them across both devices.

Mexican eCommerce Shoppers Buy Cross-Border

Cross-border shopping accounts3 for a quarter of all ecommerce sales in Mexico. Due to proximity and longstanding trade agreements, the U.S. is Mexico’s biggest source of cross-border goods, followed by China and Japan. However, many cards are domestic only, and many online shoppers expect to be able to pay in installments. So merchants need to work with local card acquirers to both ensure card acceptance and enable installment payment options.

Cash also remains a popular online payment method through voucher payments like Oxxo. And ewallets like PayPal and MercadoPago are gaining in popularity for cross-border transactions.

With such a complex payments landscape, merchants should pursue an all-of-the-above strategy to maximize cross-border sales.

Mexico eCommerce Data (US Dollar Figures)

  • Annual ecommerce revenue: $9 billion6
  • Average ecommerce revenue per user: $139.814
  • % of ecommerce purchases that are cross-border: 64%4
  • % of Mexico internet users making online purchases: 32%7
  • Projected ecommerce growth 5.9% from 2020 to 2024, for a market volume of $12.7 billion by 20248

Top Merchant Segments

Bar Graph, Top Merchant ssegments for eCommerce in Mexico

Top Payment Methods in Mexico

Mexican shoppers still like cash, but that is changing as digital payment solutions — especially those that are inclusive to unbanked people — gain greater traction in the country.

eCommerce Payment Methods Split By Spend-Per-Method3

Pie Chart: Most Popular Payment Methods in Mexico

Which Payment Methods Consumers Used In the Past Three Months?4

Bar Graphs: Payment methods used for eCommerce in the last 3 months in Mexico

Mexico Is A Major Stepping Stone to Success in Latin America

Mexico is currently Latin America’s second-largest retail market behind Brazil. However, it’s projected to knock Brazil out of the top spot in the coming years as more and more Mexicans adopt smartphones, home internet and ecommerce. The entire LATAM region provides vibrant and exciting opportunities for business growth. Mexico, with its robust and growing ecommerce economy, provides an excellent foothold into this dynamic region.

Ready to reach more customers with local payments? Check out our All-in-One Payments Solution for Mexico

 

Sources:

1) https://www.elsoldemexico.com.mx/mexico/sociedad/mexico-tendra-mas-de-126-millones-de-habitantes-en-2019-conapo-3240252.html

2) https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=MX

3) https://www.jpmorgan.com/merchant-services/insights/reports/mexico

4) Rapyd LATAM Country Profile eBook

5) https://www.pewresearch.org/global/2019/02/05/smartphone-ownership-is-growing-rapidly-around-the-world-but-not-always-equally/

6) https://www.economiahoy.mx/economia-eAm-mexico/noticias/10164564/10/19/Ingresos-del-comercio-electronico-en-Mexico-podrian-llegar-a-9040-millones-de-dolares-.html

7) https://www.es.kearney.com/consumer-retail/article/?/a/the-tipping-point-for-e-commerce-in-mexico

8) https://www.statista.com/outlook/243/116/ecommerce/mexico

 

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