Mexican eWallet ToditoCash goes fee free

Todito Cash, a payment processor and service provider headquartered in Monterrey, Mexico, disclosed Dec. 2, 2019, that it has eliminated transaction fees for its digital wallet, ToditoCash. Going forward, ToditoCash users can deposit or retrieve cash, pay bills, top-up mobile phones and purchase goods and services via the mobile app without paying additional fees, company representatives stated. Payments analysts expect the move to accelerate mobile wallet adoption in Mexico, which remains a cash-based economy, according to recent reports and commentary.

Medium blogger Guillermo Antonio Araiza Torres attributes Mexico’s slow digital wallet adoption to lack of traditional financial services and what he described as an informal economy. In a Jan. 7, 2019, post titled “The challenges of digital wallets in México,” Torres pointed out that 56 percent of the population is unbanked and six out of 10 adults are paid in cash.

“In order for digital wallets to be adopted by customers, they need to be adopted by merchants as well, allowing customers to use their ‘coded-money’ in every direction they want,” he wrote. “[F]or México this means that wallets have to offer the right incentives for merchants to include new payment systems and the benefits for customers to adopt digital wallets.”

Affordable, accessible services

Torres further noted that numerous merchants in Mexico can ill afford the high cost of credit card interchange or delayed access to funds due to electronic settlement procedures. “For a low-income business, these fees represent a considerable part of their profit and when the merchant receives a credit/debit card payment they need to wait for transfer clearance, which means the merchant need to wait between 2 to 5 days to dispose of the money, and even then 90 days later merchants are still subject to fraud and charge-backs,” he wrote.

Todito Cash CEO Ricardo Dávila believes improving service levels, access and affordability will enhance financial services and benefit the overall Mexican economy. More than 42 million Mexican consumers have no access to financial services and only 82 banks operate in Mexico. Escalating bank fees and poor customer service impact business owners and consumers, Dávila stated. He expressed hope that ToditoCash and other fintech companies will reverse these trends and challenge existing models by introducing secure, low-cost banking and payment solutions.

ToditoCash is easy to use and generates unique QR codes for each transaction, Dávila noted. Digital wallet users can pay invoices, recharge airtime and buy entertainment instantly from the comfort of their homes, Dávila added. The solution works on iOS and Android devices and is currently accepted at more than 26,000 retail, hypermart and convenience store chains. However, he sees significant opportunities to expand Mexico’s mPOS base.

Citing a recent report by Mexican telecommunications authority SCT, Dávila said there are 70 million active smartphone users in Mexico, but fewer than 18.1 percent of them are using a digital wallet or mobile payments app. That equates to 8.3 million users out of a total population of 126 million population, he stated.

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