- CoDi is a key tool for financial inclusion, but it has not met the expected adoption goals.
- The regulations imposed on businesses to accept this type of payment are hindering its expansion.
Five years after its launch, CoDi (Digital Payment System), designed by the Bank of Mexico, has not achieved the expected goals in terms of users or adoption rates.
The tool, which allows for electronic payments and collections via QR codes at no cost, projected to have 37 million registered accounts by 2022. However, as of September 2024, just over 20.3 million accounts have been registered, according to the latest data from Banxico.
The initial goal of CoDi was ambitious, based on the growing adoption of smartphones and the familiarity of Mexicans with digital banking transactions. In the words of Luis Niño de Rivera, former president of the Association of Banks of Mexico, the goal of 37 million seemed achievable in 2019. However, various factors have limited its adoption, particularly the entrenched use of cash in the country and distrust in digital tools.
The limitations
Experts point out that the low adoption rate of CoDi can largely be attributed to a lack of trust in digital platforms. Many Mexicans still prefer cash due to its accessibility and familiarity, presenting a cultural barrier that has not been overcome. Additionally, indirect costs, such as the need for an internet connection and strict regulations imposed on businesses to accept these types of payments, have hindered its expansion.
The use of CoDi is especially concentrated among certain banks: 61% of registered accounts belong to BBVA Mexico customers, while Bancoppel and Citibanamex account for 14% and 12%, respectively.
However, only a fraction of these accounts have made payments or collections, with just 3.09 million transactions in five years. This reflects not only a lack of widespread adoption but also low usage among those who are already registered.
The number of businesses accepting CoDi is also limited. To date, only 15 major retailers in Mexico, including supermarkets and department stores, have incorporated this payment platform. Moreover, the average transaction amounts remain relatively low: 1,271 pesos on weekdays and 833 pesos on weekends, according to Banxico data.
Lessons from Brazil
Despite the challenges, experts in the financial and technology sectors believe that CoDi still has enormous potential. Mexico can learn from the success of Pix, Brazil’s digital payment system, which has revolutionized financial inclusion in that country since its launch.
Pix has served as a global example of how a digital payment system can become a pillar of the financial system, attracting both businesses and consumers through a clear strategy of promotion, financial education, and the creation of attractive incentives. In Brazil, the rapid adoption of Pix has allowed millions to access the benefits of digitalization, reducing cash usage and facilitating transactions efficiently.
In contrast, CoDi has not generated the same impact in Mexico, partly due to the lack of a comprehensive strategy to drive its adoption.
Challenges and opportunities for the future
Transforming the payment ecosystem in Mexico is no small challenge. The entrenched use of cash, still preferred by millions, is experiencing a slow decline. While CoDi represents a modern and accessible tool, it needs to overcome these cultural and technological barriers to achieve mass adoption.
As Mexico advances in its financial digitalization, the success of CoDi will depend on several key factors:
- Financial education: It is crucial for both consumers and small businesses to understand the benefits and ease of use of CoDi.
- Attractive incentives: Programs offering rewards or discounts for using digital payments could encourage adoption.
- Collaboration between sectors: Fintechs, banks, and the government must work together to ensure that the CoDi system is efficient, secure, and accessible to everyone.
CoDi still has time to establish itself as a central tool in the Mexican financial system, and Brazil’s example offers a clear path forward. With the right adjustments, Mexico could lead financial inclusion in the region, facilitating a future that is less dependent on cash and more digitally inclusive.