The Business Year

Luis Arceo

MEXICO - Finance

Pay It Forward

Country Manager, iZettle Mexico

Bio

Luis Arceo is responsible for running the Mexican market for iZettle, offering a commerce platform for small businesses to get paid, sell smarter and grow their business.

“Mexico is a huge economy, the 14th-largest globally.“

Why is Mexico’s card payment market strategic for iZettle?

Mexico is an extremely important country within iZettle’s global strategy. iZettle Mexico started operating in 2013, and this was its first country outside of Europe. Today, we have a presence in 12 countries—10 in Europe plus Mexico and Brazil. Mexico is a huge economy, the 14th-largest globally, and there is low card payment penetration. Approximately 85% of consumption is still done through cash here. On the other hand, there are about 180 million debit and credit cards in the market, which means the average person has about three cards. The problem, therefore, is from the other side of the equation. Only six merchants out of every 1,000 inhabitants in Mexico accept card payments, compared to 25 in Brazil, more than 50 in the US, and as much as 70 in Europe.

What does Mexico need to become a more cashless society?

Mexico needs to fully utilize more fintech companies that provide more financial services in a more accessible way. It is important to show we can serve the unattended segment of merchants with a low-cost solution. While we can offer a safe and accessible solution to accept card payments and manage their business, traditional banking services have many requirements for these small merchants and are more focused on medium and large corporations. We have identified many areas of opportunities to better serve the financial needs of the nano, micro, and small merchant segments, our core segments. Our mission is to help small businesses access tools that were previously only available to their much larger competitors. Currently, 95% of our Mexican merchant base is nano, micro, and small businesses. However, 5% of our merchants are large corporations, like Coca-Cola and luxury boutiques such as Hugo Boss and Swatch. With iZettle, a merchant can accept any card brand with a reader that connects to a smartphone or tablet. Additionally, other hardware can be integrated like a cash drawer to complete the POS solution.

What share of the Mexican market does iZettle currently hold?

We are in the top three players in Mexico out of about 15. We have hundreds of thousands of merchants around the world, with another thousand new merchants joining us every day. We can accept merchants at any time of the day, and our solution can be utilized directly from the iZettle app. With a card reader, one can start accepting payments within five minutes, which is why so many new merchants join iZettle every day.

How will PayPal’s acquisition of iZettle impact your business in Mexico?

Teaming up with another company is not a small thing; however, when we were discussing this with PayPal’s CEO and his team, it became obvious we share the same vision of empowering small businesses. This acquisition truly gives iZettle the resources to fuel its growth. iZettle has a presence in 12 countries, and PayPal is in more than 200 countries. Together, we will offer a one-stop shop for commerce for small businesses around the world.

How are fintech companies and card brands collaborating to make countries more cashless?

This is an extremely important part of our DNA. Working together with MasterCard and Visa on specific projects has been great since we started. For example, we launched a financial inclusion program with Visa almost two years ago with the sole goal of empowering and including small merchants in the financial ecosystem. We also recently launched a contactless campaign with MasterCard. iZettle is the only card reader solution in Mexico where one can pay with a contactless card or e-wallet. We are promoting new technologies and doing great things with innovative technology. The lack of financial education among small businesses is a key barrier, and having these relationships with relevant brands such as MasterCard and Visa help us show our merchants and potential merchant clients that we are a solution they can trust.

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