Online retailers, banks and intermediaries devise creative payment methods to support B2C ecommerce growth
B2C ecommerce in Mexico, which relies heavily on travel purchases, took a big hit in 2009 with the economic downturn and the swine-flu outbreak. Since then, however, travel spending has rebounded, and B2C ecommerce has posted robust double-digit growth rates in each of the past three years. eMarketer estimates B2C ecommerce will register a 20.7% compound annual growth rate (CAGR) over the entire 2010–2015 period.
While B2C ecommerce revenues are projected to increase steadily in the forecast period, some challenges lie ahead. Two hurdles preventing even greater growth of B2C ecommerce sales in Mexico are an underdeveloped internet ecosystem and a low credit card penetration rate.
According to the International Telecommunication Union (ITU), in 2010, Mexico ranked 75th among 152 countries in the 2011 Internet and Communication Technology Development Index. ITU defines this index as a composite combining “11 indicators into one benchmark measure that serves to monitor and compare developments in information and communication technology across countries.”
Beyond internet technology constraints, the majority of consumers in Mexico do not own credit cards, which are the primary method of payment for ecommerce transactions. Data available in March 2012 from Banco de México, the country’s central bank, showed there were 25 million active credit cards in Mexico in Q3 2011, compared with 83.8 million active debit cards and over 100 million checks written. Although these figures include both business and personal accounts, they are indicative of overall payment trends in Mexico.
Because credit card penetration is low in Mexico, banks, vendors and intermediaries have adopted creative payment methods. One, for example, is an option to pay cash at bank branches for purchases made through low-cost travel websites. Also, in March 2012, PayPal Mexico unveiled plans to develop a version of its service that will support payments through mobile phones. Alternative payment methods like these will continue to support the growth of ecommerce.
Corporate subscribers have access to all eMarketer analyst reports, articles, data and more. Join the over 750 companies already benefiting from eMarketer’s approach. Learn more.
Check out today’s other articles, “Mobile and Video Grab a Greater Share of Digital Ad Budgets” and “Marketers Targeting College Kids Should Stick with Search.”