Oxxo, the largest chain of convenience stores in Latin America with a footprint of 20,000 sites, has also become one of Mexico’s largest debit card and payments firms with its recently launched Spin by Oxxo card.
Tech publication Rest of World, which specialises in the workings of tech in poorly covered continents like Latin America, Africa, and Asia, delves deep into the pivot.
It’s Oxxo’s second shift into fintech, but the first time it is working without the help of a bank. In just five months, it has grown its financial user base to 1.6 million.
Why it matters
While the digital realm is important everywhere, physical stores continue to fulfil vital roles in lower-income countries in ways that are no longer the case in many richer countries.
In the case of Oxxo, its stores are also similar to bank branches through which customers pay bills, move money, send and receive remittances and pay taxes. But trust is only one part of it.
This is really a story about leveraging convenience and a strong brand.
What’s going on?
Interestingly, RoW’s story notes that several other regional financial services firms are taking note of the company’s shift, given how much quicker its physical customer acquisition strategy has worked than anything digital, per a memo sent to the employees of Nubank, a Brazilian neobank, seen by RoW.
It’s not just the existing trust; it is also extremely quick, cheap (about $2.50 or 50 pesos) to open an account. Oxxo Spin’s rapid growth also speaks to the vast addressable audience that are the world’s unbanked.