Amazon in talks to adopt government-backed Mexican mobile payment system

Reuters have reported that retail giant Amazon has initiated talks with the Mexican central bank regarding support for a new government-backed QR code-based mobile payments service.

As part of an effort to boost day-to-day financial technologies and transactional networks, Banco de México has already begun to build the new system which will enable Mexicans to make online and in-person payments via their mobile phones.

Dubbed ‘CoDi’, Mexicans will gain access to online payments free of charge using QR codes and the government hope launching the platform will encourage people to use electronic transactions and boost the formal financial sector.

The system is expected to start with a pilot version this month.

Banxico’s director of operations and payments, Jaime Cortina, informed Reuters that Amazon and Argentine rival MercadoLibre have both approached the bank about adopting the system.

He added that both companies have said that they could “implement it relatively quickly”, adding that CoDi was specifically designed so that it can facilitate payments online as well as in stores.

If Amazon were to be successful, it could open a new customer base in a nation where more than half of the population has no bank account.

Last year, online sales accounted for only 3.9% of total retail purchases in Mexico, according to research firm Euromonitor International.

Phone-based banking platforms are a popular solution in other emerging markets such as China, India and Kenya, and many of which have been driven by user-friendly, affordable apps from private companies.

Amazon recently announced a partnership with Western Union to develop its ‘Amazon PayCodes’ in worldwide emerging markets including Chile, Philippines and Hong Kong.