Only 32.7% of the Mexican population between 18 and 70 years old have formal credit.
Traditional banks have upgraded their value proposition to reach the entire population by working on the use of their mobile banking services
The fast and efficient process of Fintechs has allowed Mexican consumers to have access to different financial services
The population needs easy access to financial services but also needs incentives to want to be part of it.
Cashback is the incentive that generates a feeling of security and happiness when making purchases with credit or debit cards.
Financial inclusion is a strategy that seeks to improve the access to financial services for all sectors of the population and could promote Mexico's economic development.
According to the National Financial Inclusion Survey (ENIF), in 2021, 27.4 million people between the ages of 18 and 70 had at least one formal credit, which is equivalent to 32.7% of the population in this age range.
There are several factors that influence the fact that only 32.7% of the population has formal credit. These include the lack of access to financial education, lack of knowledge about how to obtain formal credit, the high cost of loans, application requirements, and lack of interest in acquiring credit with any institution.
Banks play a key role in financial inclusion in Mexico. This is because banks are the largest and most established financial intermediaries in the country. This allows them to offer a wide range of financial products and at the same time address their financial inclusion challenges by implementing affordable products and services for the most disadvantaged sectors, as well as offering financial education and training to help people make smart financial decisions.
They have made sure to upgrade their services to reach the entire population by working on expanding the use of mobile banking services.
On the other hand, the now famous fintechs have revolutionized the access to financial services in Mexico by providing a digital platform to make financial transactions faster, safer and more efficient.
This has allowed Mexican consumers to access services such as loans, investments, payments, banking services and more without leaving home, saving them time and money. Technology has also allowed them to offer lower fees for their services, which has allowed consumers to have access to more affordable financial services. But how can we encourage the population to choose to be part of financial inclusion? Diego González Montesinos, Director of DINN points out:
"Creating tools that can incentivize savings through people's spending is one way to help them have a better financial life."
In the current era of digital technology, cashback is gaining a lot of popularity as a way to save money and take advantage of the benefits of financial inclusion in Mexico. This benefit granted by some banks and fintechs is a payment strategy that allows a person to receive an amount of cash when making a purchase with a credit or debit card. This amount is based on a percentage of the purchase. As the use of debit and credit cards becomes more common, cashback offers consumers a way to save money and make the most of their credit or debit cards.
"The population needs easy access to bank accounts, but they also need an additional benefit that encourages them to make purchases with electronic money and prefer to pay with their card instead of making a line and withdraw money from the ATM," says Raphael Kappeler, CEO of REWORTH.
Mexico is a country where financial inclusion is still developing, but cashback is helping to drive growth as it is a secure and convenient form of payment that gives users greater confidence when using credit or debit cards. This is especially useful for low-income consumers, who generally do not have access to banks or credit cards. In addition, cashback also helps reduce the number of unused credit cards, which greatly reduces inactive users at institutions that offer this benefit to their users.
"People nowadays upload their photos to their social networks looking for immediate gratification with likes, that is the same feeling that REWORTH seeks to give to the users of the banks affiliated in its program by sending them a push notification telling them that they have received a cashback of 10 or 20% of the total of their purchase" Raphael affirms.
Another benefit of cashback is that it allows people to save money as they make their everyday purchases. This can be especially useful for those who are worried about their finances. Cashback allows consumers to get cash back for their purchases, which helps them save money for future purchases or to save for a specific financial goal.
In addition, cashback allows individuals to improve their credit history. By using credit or debit cards with cashback, users demonstrate to banks that they are responsible with money and that they can be responsible with credit card usage. This can help improve their credit history and allow them to obtain a credit card with better interest rates and benefits.
In conclusion, cashback offers a range of benefits to consumers in Mexico. This easy and secure payment strategy helps improve financial inclusion in the country, reduces the risk of financial fraud and improves users' credit history. In addition, cashback allows people to save money as they make their daily purchases. Therefore, cashback is an effective way to save money and reap the benefits of financial inclusion in Mexico.
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