Since late November 2021, Mexico’s ubiquitous Oxxo stores have been covered with bright purple signs. “Get your Spin by Oxxo card!”
Spin by Oxxo, a ready-to-use Visa debit card and app, is the company’s latest attempt to merge its massive retail infrastructure across Mexico with financial services. By early March, the company had announced that 1.6 million people had signed up for Spin. That rush of sign-ups made Oxxo, a traditional brick-and-mortar chain of convenience stores, one of the fastest-growing debit card companies in Mexico. Oxxo has gathered users in numbers comparable to established banks and more than most neobanks — technology-driven startups that aim to open up banking to the masses.
Customers can sign up for Spin at every one of Oxxo’s approximately 20,000 branches in Mexico. An account comes with an accompanying app that allows digital payments, transfers, and access to a loyalty program. Rest of World reached out to Oxxo for comment, but the company said they’re not currently sharing information about Spin.
“Launching any financial product costs a lot of money, but companies like Oxxo have the size and resources to subsidize costs and scale faster than any fintech,” René Lankenau, former head of digital innovation at the Mexican bank BanRegio, told Rest of World.
Founded in 1978 as a retail experiment by its parent company FEMSA, 13 million individuals shop at Oxxo daily. Most of them are in Mexico, but the chain also has about 310 stores in Peru, Colombia, Chile, and Brazil. FEMSA employs around 230,000 people.
Besides selling basic staples, SIM cards, cheap phones, and prepaid Netflix cards, Oxxo cashiers also perform a bank clerk’s duties, allowing customers to pay their utilities, make bank transactions, buy data for their phones, send remittances, or pay their taxes using payment processors like Conekta.
Spin is Oxxo’s second foray into the debit card world. In 2014, the company also launched a prepaid Visa debit card, Saldazo, with Citibanamex, one of Mexico’s largest banks. Before Citigroup, Citibanamex’s owner, announced it was closing commercial banking operations in Mexico in early 2022, Oxxo had already terminated its relationship with the bank. Spin will coexist with Saldazo, but it’s now Oxxo’s main debit card project.
To launch Spin, Oxxo didn’t team up with another traditional bank. Instead, it’s working with ComproPago, a Mexican fintech startup that facilitates cash payments and transfers on its platform. According to fintech analysts and competitors, Oxxo is leveraging the two strongest assets in its arsenal to grow its user base: sheer convenience and brand recognition.
Even the world’s largest neobank, Brazil’s Nubank, is keeping an eye on Oxxo’s move into fintech. The convenience store chain’s strategy of “acquiring customers physically [has] seen higher and faster customer growth than their competitors,” notes a confidential memo to employees sent by an internal Nubank business analysis team earlier this month. “It is something for us to consider,” said the memo seen by Rest of World.
Christine Chang, a partner at Rally Cap Ventures, a VC firm, said Oxxo’s advantage over other fintech products on the market is that users in Mexico still seek out a physical presence when choosing a financial product. “You see an Oxxo on every block, so the brand is much more recognizable than that of a new fintech,” she told Rest of World. “I’ve talked to fintechs whose entirely digital products have failed because users don’t trust the new brand.”
“The families that own FEMSA made their wealth from owning banks,” Lankenau said. “I believe Oxxo will become a super bank.”
María Isabel Maldonado, a 65-year old unbanked janitor, is a recent Spin adoptee. “I paid $50 pesos [around $2.50], got the card immediately, and 24 hours later, I was getting money deposited,” she told Rest of World.
Among the broad offerings of ready-to-use debit cards in Mexico, Spin is so far the only option available to use on the spot, without any additional online registration or app download. Though its use is encouraged, the Spin app is not required to use the card.