A nationwide chain of convenience stores called OXXO has helped more than five million low-income Mexican workers get access to banking with simple digital accounts that can be activated in less than five minutes. The Saldazo accounts require no minimum balance, and cost less than two dollars to set up. More than 14,000 OXXO stores are participating in the scheme, which is run by Banamex bank.
Results & Impact
OXXO, a nationwide chain of convenience stores, has become the country’s leading bank account supplier, having opened five million Saldazo accounts to date. The Banamex account has a peak sign-on rate of more than 29,000 accounts per month, and sees in excess of 7 million transactions monthly. The average account balance is $20.
Low-income workers can go to any OXXO corner store and open a digital account in less than five minutes, at a cost of less than $2. The service is issued by one of the country’s largest banks, Banamex. The account can be activated at more than 14,000 OXXO outlets. To meet the specific requirements of low-income workers, who are often employed at short notice and at irregular hours, over-the-counter services are available daily from 8am to 8pm, seven days a week. These services include balance checks, transfers, payments, mobile data top ups and in-store purchases.
Cost & Value
The accounts cost less than $2 to open
Running since 2012
A convenience store chain in Mexico has found a way to reach millions of unbanked low-income workers who have never had access to financial services.
Launched in 2012, Saldazo is a simple digital account with no minimum balance. The service is issued by one of the country’s largest banks, Banamex, through a VISA card, and can be sold and activated in five minutes for less than $2. More than 14,000 outlets of Mexico’s largest convenience store retail chain, OXXO, sell Saldazo accounts. They function as card-based digital wallets, but come with additional services, such as access to Banamex’s mobile money transfer service, balance inquiry and withdrawals.
Since the service was launched, OXXO has become the country’s leading account supplier, having sold more than five million accounts by the end of 2016. Saldazo has a peak sign-on of more than 29,000 account per month, and sees in excess of seven million transactions each month.
In a drive to meet the specific requirements of low-income workers, who are often employed at short notice and at irregular hours, over-the-counter services are available daily from 8am to 8pm, seven days a week. These services include balance checks, transfers, payments, mobile data top ups and in-store purchases. The card can also be used at all VISA retailers.
Currently, only 40% of Mexicans (about 33.6 million people) have a bank account of any kind. Low-income workers have historically not had bank accounts, or used them sporadically. About 63% of the 33.6 million Mexicans with access to any financial services have a checking account, while 40% use a savings account.
Of those without accounts, around 11 million considered themselves “debanked,” meaning that they once had an account. Around half of the debanked population say their checking account stopped being a necessity once they stopped working. Ten percent said they never had any use for one; another 10% said they had a bad experience with their account.
“Rebanking” those who have left the banking system – and banking those who have yet to enter it – is a major challenge in Mexico. Any solution requires combining specific needs for certain products with accessibility.
One of the reasons why OXXO’s initiative has been so successful is because the company has been willing to take a chance on risk-based banking. The chain also has a formidable footprint in Mexico with high brand recognition and a large customer base.
Some 71% of Saldazo clients are below the age of 40 and 54% of them are women. Around 8,500 cards are sold daily throughout Mexico, with 81% of them linked to mobile phones. The average account balance is $20. Saldazo users also have an affinity for over-the-counter transactions, with only 16% of them having activated their mobile transfer option.
(Picture credit: Flickr/iivangm)