If you have ever been to Mexico, you will be familiar with Oxxo. The ubiquitous chain of grocery stores seems to have a location on every corner. Indeed with over 17,000 locations in Mexico, that may well be the case. But for e-commerce businesses looking to expand into Mexico, they are more than just a place to buy bread and milk. Oxxo also provides an essential cash based payment method for online purchases.
Why is Oxxo such an important payment method online?
As an international business, you may wonder why cash payments are so important. The answer lies in Mexico’s unbanked population. Even though recent years have seen a drop in the number of citizens without a bank account (from 63% to 53%) the majority of Mexicans still don’t have access to financial services. In a country of over 126 million people that amounts to an estimated 42 million Mexicans unable to purchase items online using traditional payment methods. It is for this reason that BoaCompra embraces the Oxxo payment system on behalf of our clients. By offering a trusted, cash based payment system, BoaCompra ensures that our international e-commerce clients can reach the widest possible number of customers in Mexico.
How does Oxxo work?
For customers, once the purchase has been finalized and Oxxo is selected as a payment method, a barcode is generated. This barcode can then be taken to any of the 17,000 Oxxo locations, scanned and paid for in cash. At this point, a payment notification is returned to the store who can then process the payment and release the purchase. Oxxo stores are present nationwide and are easily visited in the process of completing grocery shopping or even on the way home. In this way, customers can make online purchases with ease, without the need for a bank account or other financial instrument.
Why is Oxxo so popular?
The popularity of the payment method lies in its efficiency and convenience (both for customers and retailers). Oxxo itself is a large, trusted brand in Mexico. As such, the majority of Mexicans are familiar with Oxxo, and are comfortable making a financial transaction in the store. For 57% of working Mexicans, Oxxo has a second draw. According to government estimates 57% of Mexicans currently work off the books. As such, the Oxxo payment method allows them to make online purchases without passing through a financial institution.
For retailers, Oxxo is equally trustworthy. As a large recognized brand, Oxxo can be relied upon to collect and manage payments on behalf of your business. In accepting cash through Oxxo, you can also expand your potential customer base to include the additional 42 million unbanked Mexicans.
How can you integrate Oxxo in your checkout process?
The Oxxo payment system can be integrated into your checkout process by creating a link between the Oxxo API and your own checkout process. By working with a payment aggregator, like BoaCompra, you can streamline this process further. BoaCompra can manage the communication between Oxxo and your store, ensuring that the customer’s payment is received, and any necessary reminders or payment expiration terms are communicated. This ensures a reduction in missed payments, and the immediate transfer of funds to your business account.