Cash is king, as the saying goes.
Cash has attributes that people value. It’s tangible — with cash in hand, consumers know exactly how much they have to spend and what they can’t spend. Money is, for many consumers, the ultimate form of budgeting.
Ignacio Caride, Walmart’s senior vice president for eCommerce, Payments and Financial Services in Mexico and Central America, told PYMNTS’ Karen Webster that marrying cash to digital apps can create new commerce ecosystems — with the retail giant’s physical stores at the center of it all.
As a result, unbanked and underbanked populations can access payment options that stretch well beyond cash itself and access rewards that once were limited to credit card holders.
To that end, earlier this month, Walmart Mexico and Central America said it had upgraded a number of features to the Cashi digital payments app, laying the cornerstone to become a financial services provider to consumers across the country.
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Drilling down a bit, Caride explained the Cashi “more than cash” offering gives its consumers access to more than 70 digital payment services. The expanded Cashi gives users digital options to pay for services, including utilities such as internet, phone and electricity.
The July announcement is the latest example of boosting the retail giant’s strategy to reach the 42 million unbanked consumers across Mexico, many of whom are middle-class.
“We already have those clients going into stores every day,” said Caride. But there’s a lot that Walmart doesn’t know about them — because the transactions are being made in cash, so anonymity rules the day.
Rewards and Benefits
The Cashi initiative differs from the promotions typically seen in Mexico, Caride said. In many cases, for consumers to get the benefits of a promotion — to get free installation of an appliance at home, for example, or even signing up for Netflix or other streaming media — they need to have a credit or debit card.
Often if someone wants to pay a bill, they have to go to a convenience store to pay with cash, and they are charged an additional fee to that utility or provider.
“If they don’t have those cards,” he said, “they don’t get the benefits — and these are the customers who need these promotions the most, especially in inflationary times such as these.”
See also: Walmart Mexico Plans to Double Its 2 Million Mobile Phone Users in 2022
The mechanics of the Cashi app are relatively straightforward: Users top up the app with cash and they access the benefits. Additionally, users can earn as much as 2% back when they purchase services within the brick-and-mortar Walmart environment.
“Cashi is the enabler of all of these benefits,” Caride said. “And these benefits that they get from us are tied to day-to-day necessities such as groceries or boosting the minutes on their cell phones. People use these things every day.”
There are positive ripple effects felt throughout the ecosystem, he said. Walmart’s suppliers can benefit from knowing more about consumers’ behavior and spending patterns. Given the fact that Walmart has 2,700 stores in Mexico — and Cashi had 1.7 million users at the end of last year and now has 3.4 million users as of July of this year — “we have more ‘points’ of contact than the whole banking system in the country.”
Looking ahead, he said the next steps involve obtaining a FinTech license that will let Walmart Mexico provide services like peer-to-peer (P2P) payments or receiving remittances digitally through Cashi — all of which should be onboarded through the next several months. As a result, the super app is inching ever closer to reality in Mexico.
“That’s the idea. That’s our plan and that is what we are building,” Caride told Webster. “Our motive is to give consumers access to the digital economy.”
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