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From CoDi to DiMo: Mexico’s second shot at growing digital payments

First came CoDi, or “Cobro Digital” (Digital Collection). But it didn’t take off. The system, launched by the Bank of Mexico to accelerate instant payments in the country, was pioneering even before Pix came online in Brazil a year later. But it did not succeed, and today, most Mexicans are unaware of what it entails. Now, in a second attempt, DiMo turns one year in Mexico, yet another initiative to promote online payments in Latin America’s second-largest economy.

DiMo, short for Mobile Money, aims to gain traction among Mexicans by using only mobile phone numbers for money transfers. However, like CoDi, it has some limitations: both are focused on the banked population, as indicated by specialists.

Yet, it is expected to be more open to fintechs this time around. Currently, 19 financial institutions can provide the service. Fifteen more are in the incorporation process, central bank officials have said. As of recently, the regulator said there were already over 7 million registered accounts for DiMo, which facilitates money transfers using only the recipient’s cellphone number.

“As DiMo becomes more widely available through financial applications, electronic payments adoption will be facilitated, simplifying the process of sending transfers,” stated Victoria Rodríguez Ceja, the governor of the Central Bank.

CoDi´s case in Mexico

Throughout Latin America, instant payments aiming to reduce cash usage while promoting greater financial inclusion, are advancing. But not at the same pace in every country.

The numbers tell the story for CoDi, introduced in 2019. Unlike Pix, which was immediately available for hundreds of financial institutions, ranging from banks to fintechs to payment providers in Brazil, CoDi in Mexico was supported by only a handful of traditional banks.

Over the course of four years, the system has recorded less than $1 billion in total transactions. It counts 1.9 million accounts that have conducted at least one payment. This starkly contrasts the remarkable success of Pix in Brazil. Over 140 million users and a monthly transaction volume exceeding USD 400 billion.

“In the case of Mexico and CoDi, the system is highly concentrated. It was unsuccessful for various reasons,” says Ignacio Carballo, Head of Alternative Finance at Americas Market Intelligence. “Among others, cash usage in Mexico is immensely higher than in other regional economies.”

FIntechs now onboard

Taking lessons from past endeavors, DiMo has been extended to include financial technology institutions this time around. Leading Brazilian fintech Nubank, for instance, announced plans earlier this year to integrate DiMo into its Mexican app.

“We see a great opportunity in DiMo to simplify money transfers, reduce cash usage, and drive the digitalization of the country’s economy,” commented Iván Canales, who leads Nubank’s operations in the country. “This opens up the possibility of sending and receiving money using the recipient’s ten-digit cellphone number as a reference, with no commission or cost for users,” he emphasized.

In a recent study on the growth of mobile banking in Mexico, BBVA Mexico projects an increase in mobile transactions in the coming years. By 2025, they will account for 18% of the total, and by 2030, 23%. The bank was the first to enable DiMo in June 2023.

Fintechs are booming in Mexico but financial inclusion is lagging

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