Mexico: A Review of the Payments Market

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Xsolla examines the state of the gaming market in Mexico and covers the most common methods of payment.

The Gaming Market in Mexico

According to information attained from GlobalCollect and Newzoo, Latin American countries in 2014 received $3.3 billion in profits from the sale of video games and in-game items. This is an astonishing 4% of the global market. The pace of growth in the Latin American region for the gaming industry is second only to Asia (14% per year).

As far as profits go, in South America, Mexico boasts second place at $1.01 billion dollars.

According to the largest retail gaming network, Gamer’s Paradise, the Mexican market is doubling every four years: $600 million in 2007, $780 million in 2008, $1 billion in 2009, $1.25 billion in 2010. The total market is valued at over 15 billion pesos ($1.2 billion).

Popularization of online games in the country contributes to the spread of the Internet. As of January 2015, the country has recorded more than 65 million Internet users. By 2018, their number could increase to 80 million. The most common platform for access to the network in Mexico remain mobile devices.

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“The gaming industry is growing a lot in Mexico and Latin America. I remember reading a few months ago that Mexico has the 2nd highest growth rate in the gaming community, Brazil being the first. However, sales figures and income are far from the expected level due to the poor economic performance of Mexico in recent years and the Mexican peso-US dollar exchange rate is playing against the consumers, leading games prices to a level where the vast majority of the population can’t afford them. This has led to a lot, and I mean A LOT, of piracy. Video games in Mexico cost about 1.5 times what they do in the US and the minimum wage is less than 10% of the American salary.

In spite of that, a lot of young entrepreneurs have pursued game development and come out with very good ideas and projects that are on par with your average studio in a development country, with mobile development making up a bigger portion of the development landscape, for better or for worse. I can safely say that talent isn’t a problem of game development in Latin America, but investment interest and support is.

In terms of market share, it isn’t very different from the US; although I don’t have any official numbers, I’m speaking out merely from what I see in the community. Xbox was easily the dominant brand during the last generation and still maintains a strong presence, with Playstation being its main competitor here. Nintendo isn’t very popular with the mass market here, being sustained only by its fanbase. PC gaming is growing as it is doing everywhere, but it’s hurt by the piracy culture that unfortunately affects the market’s health.” – Adolfo Aguirre, Mulaka Community Manager.

The Most Popular Payment Solutions in Mexico

Like many other Latin American countries, Mexico prefers cash but there are many other popular methods of payment including electronic wallets, prepaid cards, and Internet banking.

Electronic Wallets

PayPal

The global payment system occupies a significant market share in Mexico. There is a full range of services offered by PayPal which makes it much easier to work with electronic payments. PayPal was launched in the region in 2008 so the inhabitants of the country are well acquainted with it’s features.

MercadoPago

According to Globe Newswires report for the fourth fiscal quarter of 2014, the number of payments through MercadoPago increased for five consecutive quarters. During this period, payments increased by 58.2% compared to the previous period. Total turnover amounted to $1,098.6 million in the last three months of 2014. In addition to Mexico, MercadoPago is also popular in Brazil, Chile, Argentina, Colombia and Venezuela.

Cash payments

According to Xsolla, cash payments continue to be one of the most common methods of payment in games. The mechanism and process used to allow purchasing via cash payments is similar to that of many other markets including Brazil: the user selects an item, then a payment method, and finally receives a receipt with a bar code. The user must then take this bar code to a bank branch or store to pay with cash.

Banks

Bancomer

The largest bank whose major shareholder is a Spanish financial company BBVA. Bancomer owns almost 20% of the market. The country has more than 1,700 branches and 4,200 branded ATMs. According to official reports, Bancomer boasts a total of 11 million customers.

Santander

The world’s largest Spanish banking group is well represented in Mexico. According to Forbes, the parent company holds the 43rd place on the list of largest corporations in the world. The Mexican bank branch is part of the financial group, Grupo Financiero Santander Mexico which provides a wide range of banking services to private and corporate clients.

Banamex

Banco Nacional de México (Banamex) is the second largest Mexican bank, second only to Bancomer. The company belongs to the American corporation, Citigroup. Banamex employs 41,300 people and the total assets of the company were estimated at $58.4 billion in 2011. The Banker magazine called this company the best private bank in Mexico.

ScotiaBank

Canada’s largest bank serves 21 million customers in 55 countries, including Mexico. ScotiaBank offers a wide range of the most diverse products and services including: asset management, personal, commercial, corporate and investment banking. Total assets are estimated at $791.8 billion.

Banorte

Banco Mercantil del Norte (Banorte) is another major Mexican bank. Banorte manages assets worth $62.9 billion (as of 2011) and has 950 branches. The bank operates with 12,500 people and is the only Mexican bank which is owned by local businessmen, not international holdings. Banorte’s capital is valued at $5.8 billion.

Retailers

OXXO

The largest and oldest network of retail stores in Mexico. The company has more than 11,000 outlets in Mexico and Colombia. OXXO offers a wide range of payment options (details can be found here) and is very popular when payments are on the Web.

7-Eleven

The largest international network of retail stores working on the franchise system. The first representative office was open in Mexico in 1971. In addition to receiving payments on receipt, 7-Eleven is also attempting to conquer the market of electronic purses.

In March of this year, 7-Eleven Mexico launched a loyalty program called Big Coins, which the developers call the virtual social currency.

The Big Coins user gets charged for electronic purchases and activity on social networking sites or the company’s official blog. The Big Coins are stored in an electronic purse and the user may spend the coins for the purchase of products at 7-Elevens in Mexico. In the future, the currency will become a full-fledged settlement agent.

Prepaid cards

PaySafeCard

PaySafeCard is a reliable and secure way to pay for goods online. This tool is distributed in various regions, including Mexico. There is a special emphasis on the protection of personal information and tools for the user.

Todito Card

This prepaid card is used to pay for various services including buying goods on the Internet. You can reuse the card multiple times. The Todito Card can be replenished from any of the 1,400 branches and 1,300 Banco Azteca branches of HSBC in Mexico.

Todito Cash is a prepaid Internet card which is sold in the same outlets as the Todito Card. Unlike Todito Card however, Todito Cash cannot be used to pay for goods and services online.

Internet Banking

Internet Banking within Mexico is poorly developed. Perhaps in a few years it’s shares will increase but speaking on the active use of Internet Banking within Mexico for games is still too early.

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The Mexican payments market is showing incredible variance. The abundance of alternative payment methods and extensive Internet coverage allows hope for higher profits for online game developers in the region.

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