Mexico is a natural starting point in expanding Dapi’s presence in the region. With a GDP of USD 1.2 trillion, it is the second-largest market in Latin America. 39.5% of Mexico’s 129.9 million residents use smartphones and could thus access mobile payments. The country has a robust startup ecosystem, with 25.6% of Latin America’s fintech companies. Currently, this market is underserved. Most vendors in the country simply refuse to accept cashless payments, because they don’t want to pay high card fees. Card payments are very expensive for merchants around the world, who have to pay a processing fee, a card scheme fee, and an interchange fee. These fees benefit payment processing companies, card networks, and banks respectively, but for the merchant, they only mean significantly reduced margins. In Latin America, where margins for vendors are already paper-thin, choosing between cash and card could mean the difference between staying in or going out of business.
The main digital payment system is actually a hybrid scheme that allows customers to generate a barcode for an online purchase, which they can then pay for wish cash in a physical store or through their online bank app. While an improvement, the system is still cumbersome, often requiring customers to physically leave their homes to make an online purchase. As for merchants, while accepting payments through this scheme is cheaper, they need to wait 1-2 days for confirmation of purchase, which can delay the settlement of their products.
Dapi’s payments can be done from anywhere and provide instant payment and confirmation. The company’s technology works by automating bank account transfers. This way, companies can receive bank payments and get instant confirmation of the funds, as easy as card payments but without the fees. This development is going to be revolutionary in Mexico, especially as Dapi is going to support more than the top 10 local banks, which covers over 80% of the market. Dapi’s solution addresses the merchants that are currently struggling with the expenses of traditional payment methods, delays, confirmation issues, and other errors.