MEXICO CITY : U.S. retail giant Walmart wants to get on top of Mexico's fintech market with its Cashi digital wallet, yet analysts say its drive is strewn with potential pitfalls due to the proliferation of risky clients in the largely untapped market.Walmart de Mexico (Walmex) in April said it had bought
MEXICO CITY : U.S. retail giant Walmart wants to get on top of Mexico's fintech market with its Cashi digital wallet, yet analysts say its drive is strewn with potential pitfalls due to the proliferation of risky clients in the largely untapped market.
"We want to be the best financial services application in Mexico, and that requires constant investment," Marcelino Herrera, Walmex senior vice president of financial services, told Reuters. Walmart plans over $15 billion in capital expenditures for automation and alternate revenue streams in 2023, including its ad business, third-party marketplace, and deliveries.
Herrera said low banking penetration in Mexico, where less than half of adults have accounts, was an opportunity for Cashi. "The niche of clients this type of fintech focuses on is very risky," said Rodrigo Marimon, a Moody's analyst for financial institutions, pointing to recent insolvencies at non-bank lenders Credito Real, AlphaCredit and Unifin.
The ratio of non-performing loans at the Mexican unit of Nubank, Latin America's largest fintech, was 12.2 per cent in February, above the 11.4 per cent average for microfinancing firms, according to official data cited by Brazilian bank Bradesco.
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