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Amazon is working with a central bank to create QR-based payment system

The central bank of Mexico is in talks with Amazon to launch a new mobile payment system, backed by the state. That would allow consumers to pay for purchases online using QR codes, said the general director of payments of the bank.

It would be the first time that Amazon, the world’s largest online retailer, offers scanning technology in Mexico. And could eventually open a new customer base in a country where more than half of the population does not have a bank account.

The payment system, known as CoDi, managed and created by Banxico, will allow customers to make payments online. In person through their smartphones for free using QR codes. Its objective is to attract more people to the formal financial sector.

A pilot project is expected

Amazon and its Argentine rival MercadoLibre, have approached Banxico to analyze how to include CoDi as an additional payment modality to those they currently have, Jaime Cortina, general director of Operations and Payment Systems of the monetary entity, told Reuters.

“They have also told us that it could be implemented relatively quickly,” Cortina told Reuters, adding that CoDi was designed so that it can facilitate online payments as well as in traditional stores.

Amazon declined to comment. MercadoLibre confirmed that its payment platform. MercadoPago, has been in contact with Banxico to look for digital payment solutions but did not elaborate.

Mobile banking is popular in other emerging markets such as China, India and Kenya, and has been driven by affordable and easy to use applications for private companies.

Online retailers should not have problems incorporating

Cortina said that online retailers should not have problems incorporating technology at the same time as banks and other participants in the existing inter-bank payment system, which is the basis of CoDi.

Only 3.9 percent of retail sales were made online in Mexico last year, according to figures from the research company Euromonitor International, with Amazon and MercadoLibre among the main participants.

Both retailers want to encourage unbanked customers to shop online and allow cash payments at convenience stores. Amazon also launched its first debit card last year, targeting consumers without credit cards.

The new government of President Andrés Manuel López Obrador is betting on financial technology to help lift Mexicans out of poverty. The wide acceptance of CoDi would mark an important step in its financial inclusion strategy.

Also published on Medium.

Published inFintech

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