Government payment platform CoDi has yet to take off in Mexico

Contxto – Even the best-intentioned public policy can fall a little flat. Case and point is Mexico’s mobile payment platform, CoDi.

The government launched this system in September of last year and an initial survey showed many users didn’t even know what CoDi was. I’m sure you know, but just in case: It is the Mexican Central Bank’s free, mobile electronic transfer system.

But surely, reason dictates that the coronavirus pandemic surely pushed users into embracing the platform, right? Once again there’s evidence to suggest that it’s not really the case.

Much to the Central Bank’s dismay, small businesses and users aren’t all over the platform. In June, authorities disclosed a few numbers that illustrate CoDi hasn’t fully seeped in. Here’s a quick breakdown:

3 million people have downloaded the app
167,424 users have made payments through it
Over 140,000 users have received a payment via the CoDi app

The stark difference between app downloads and its actual usage shows something’s not working.

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They’re just not that into you, CoDi

What could’ve gone wrong? Multiple factors could’ve influenced this (thus far) underwhelming outcome:

Media campaigns are insufficient to raise awareness and guide users into using these “new” types of tools
Users already rely on free transaction services from third party companies (banks and fintechs)
Mistrust of officials trying to keep fiscal tabs on its citizens
General skepticism towards tech

Plus there’s a dependent relationship when it comes to payment options between vendors and shoppers.

When consumers are conscious of the benefits of electronic payments, they pressure businesses to accept them. This also applies inversely. So if the Central Bank of Mexico wants more shops to use the service it will also have to appeal to consumers.

Related article: Central Bank of Brazil to launch payment application, PIX

Likewise, authorities hope that as businesses slowly start reopening, they’ll use CoDi. Authorities trust that recommendations by word of mouth coupled with a need for contactless payments will lead to further adoption.

Let’s hope they’re right.

Will Brazil stand a better chance?

All of this serves as a valuable lesson for the Brazilian government as it prepares the launch of its own payment processor, PIX, in November of this year.

The service will allow transactions to be settled almost immediately. Moreover, DINAMO Networks, the company working with the Central Bank on PIX, recently announced that there’s another benefit for Brazilians.

“The instant payment system will allow the settlement of purchases to be made in 30 days, for example,” says Marco Zanini from DINAMO Networks

So it appears it will work somewhat like a credit card wherein a purchase can be paid at a later date. Though further details as to how this perk will work have yet to be released.

Either way, that might motivate users to adopt it.

Related articles: Tech and startups from Mexico!

-ML