Mexico, Sep 06 (V7N) – In a country where cash remains the preferred method of transaction, Mexico’s neighborhood tortilla makers are beginning to explore financial technology. Traditionally sidelined by the banking sector, these local vendors are cautiously adopting a new mobile app developed by the National Tortilla Council in collaboration with Finsus.
The app, designed to facilitate card payments, QR code transactions, and cellphone billing, is viewed as a game-changer by the industry. Homero Lopez Garcia, president of the National Tortilla Council, has set an ambitious target for 90 percent of tortilla makers to integrate the app within the next three years.
Early adopters have responded positively, with many finding the app user-friendly. The app also offers additional services like cellphone top-ups and bill payments, aiming to provide tortilla producers with new revenue streams.
For many in the sector, this app represents their initial foray into the formal financial system. With only about half of Mexico's 129 million residents holding bank accounts and a significant number of tortilla shops operating informally, the app offers a crucial link to financial services.
Abel Garcia, a tortilla producer from Iztapalapa who has been in the business for 25 years, is already seeing benefits. Garcia, who once struggled to secure bank loans, has found the app a convenient alternative to traditional banking, which he had previously avoided due to restrictive terms.
Tortilla production is a major industry in Mexico, with an estimated 110,000 to 135,000 businesses involved, mostly operating in the informal economy. In Mexico City alone, around 18,000 tortilla shops exist, but only about 10 percent are legally registered. Many of these businesses, along with their employees, prefer cash transactions due to fears of bureaucracy and tax implications.
Maria Adelaida Francisco, an employee at a local tortilla shop, has begun using the app to pay her electricity bill, a new experience for her. Some producers, hesitant about the complexities of banking, are now using the app to pay their staff and manage transactions more efficiently.
The shift towards fintech in Mexico is part of a broader trend in Latin America. Mexico hosts about 20 percent of the region’s fintech ventures, making it a significant player in the sector. A report by the Inter-American Development Bank and Finnovista highlights a surge in fintech startups, with numbers increasing over four-fold from 2017 to 2023.
Despite these advancements, Lopez Garcia notes that financial inclusion for tortilla makers remains minimal. "The banks don’t believe in the industry," he said, reflecting ongoing challenges in integrating this vital sector into the formal financial landscape.
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