Digital Payment Partnership
Clip and Visa have some history together. Both have collaborated on joint initiatives in Mexico before. However, its focus was mainly on encouraging MSMEs to accept electronic payments and teaching micro-business owners how to use Clip solutions and educating them on how to grow their business.
On the other hand, the results of this new collaboration are apparent even to the most superficial viewers. A quick look at any clip’s bright orange advertising material reveals the Visa blue mark. It seems that part of the “strategic” deal involves some kind of advertising clause.
Financial Inclusion in Latin America
There is still a long way to go when it comes to regional financial inclusion. According to a UN regional commission, MSMEs still play a critical role in the economy in this part of the globe. Specifically, they represent 25% of Latin America’s gross domestic product. So small is the regional norm that 61 percent of all jobs come from companies with fewer than 250 employees – the most widely accepted definition of “midsize.”
However, in countries such as Mexico, access to electronic payments is still a central limiting factor. According to Visa, there are 1,000 POS terminals for every 100,000 people in the country. Compare that to 3,233 in Brazil and 4,787 in Costa Rica.
Indeed, there is no doubt that the other payment giant, Mastercard, will soon begin to become familiar with Clip’s competitors – think of Kiwi, iZettle and Mr. Pago. Even the Mexican government is betting on the game of financial inclusion. Earlier this year, it launches the pilot of its digital payment platform, CoDi.
Therefore, while this agreement bears the word “inclusion” with enthusiasm, some could easily consider it just another cash resource from major payment providers like Visa. Latin America’s cash-dependent markets look ripe for the harvest. So, considering that 95% of Mexico’s population is just money, the Visa-Clip pact really looks “strategic.”
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