A few years ago, in another period of rate increases, I remember the statement by a member of the Banxico’s Governing Board in the sense that the higher rate actually had little effect on growth, since the penetration of the financial system in our economy was low. Although this is a statement with a large dose of truth, it is actually unfortunate, since the Bank has just the mandate that the financial system better serve the economy and society itself. A few days ago, Victoria Rodríguez, the Bank’s governor, in her appearance in the Senate, referred, albeit briefly, to a very good initiative of the institution, that of DiMo, which indeed has the potential to contribute significantly to compliance of said mandate.
DiMo (Mobile Money) is an electronic transfer platform through the telephone of the person receiving the payment, without further bank details, which has recently been made available to agents that offer services through the Interbank Electronic Payment System , the SPEI. This initiative has generated a lot of interest among all types of financial institutions beyond traditional banks, as it represents an enormous opportunity to promote the digitization of finances and reduce the use of cash (remember that in Mexico, 90% of transactions under 500 pesos are still made in cash); contributing greatly to financial inclusion in Mexico, but also with positive effects on the issue of security.
Venmo, with more than 60 million users, in the United States and Pix in Brazil, with more than 300 million transactions per month, are the examples that DiMo can aspire to in Mexico. For this, it will be important for Banxico to specify what the functionalities and characteristics of the instrument will be. For example, it is important to clarify how it is an advance compared to PagoCel, which requires user information in addition to the mobile number, and how it will ensure that it does not have the same fate as CoDi, which did not have the expected adoption (one assumes that that is exactly the reason why DiMo is now launched), presumably because the incentives of the instrument were not aligned with the operators of financial services.
In addition, it is not yet clear whether DiMo will allow people without a bank account to make and receive payments, either by opening an account or from a payment order. That would be the best way to make more people part of the financial system, since they can move money easily and at no cost. A person to whom a transfer is made through DiMo and who does not have an account could choose the financial institution that is most convenient for them to receive it, motivating them to compete for their preference. Once a person is already part of the system, because they make or receive transfers, they would also have access to other savings, insurance, credit, and payment services. The system could be used, for example, to disperse social programs at no cost, with the advantage that opening accounts in this way would integrate people into the financial system, from which they could receive more services.
In the Governor’s intervention on this initiative, these questions were not addressed. I hope that the Bank takes the launch and adoption of DiMo as its priority and that the banks and financial institutions connected to SPEI get ready to offer and promote the use of DiMo among their users. Only then will the Mexican digital payments ecosystem take off and we will be able to advance in two of the most lagging aspects of the Mexican economy: inclusion and competition in the financial sector. This is an enormous opportunity to massively offer Mexicans services that could represent an opportunity to improve their financial health and quality of life, so that the financial system truly serves society.
Twitter: @vidallerenas
