In the rapidly evolving digital landscape, Mexico’s tortilla makers are making significant strides by embracing financial technology through a dedicated mobile application. This movement from a cash-based informal economy to a structured digital one highlights a broader trend of financial inclusion within this traditionally marginalized industry in Mexico. The technological shift is driven by a mobile application developed jointly by the National Tortilla Council and technology company Finsus, which is revolutionizing how tortilla vendors manage transactions. By facilitating payments via cards, QR codes, and cellphone numbers, the app is modernizing their operations in a highly impactful way. Considering that over half of Mexico’s 129 million people do not have a bank account and that most tortilla businesses operate informally, often relying on cash transactions, this innovation is particularly compelling.
Financial Inclusion through Digital Transformation
Homero Lopez Garcia, the president of the National Tortilla Council, envisions that within three years, 90% of tortilla makers will have adopted the app. Early user feedback has been overwhelmingly positive. Many vendors find the app intuitive and helpful, which bodes well for broader implementation. The application also offers additional revenue streams by enabling services like cellphone top-ups and bill payments. This multi-faceted approach underscores the app’s potential not only to streamline transactions but also to diversify income for tortilla vendors. The necessity and promise of this technological shift are vividly illustrated by the experiences of entrepreneurs like Abel Garcia, who have struggled with accessing traditional banking services. Garcia’s journey mirrors a widespread narrative among tortilla industry entrepreneurs who face significant hurdles in obtaining credit and other financial services.
In Mexico, tortillas are an integral part of the diet, with millions consumed every day. Between 110,000 and 135,000 businesses are involved in their production, yet most operate outside the formal economy. For example, out of approximately 18,000 tortilla shops in Mexico City, only 10% are officially registered. A 2021 survey by the banking regulator CNBV revealed that 64% of Mexicans prefer cash over cards, further emphasizing the challenge of integrating digital transactions within this sector. The app aims to alter this landscape by making financial services more accessible and less intimidating for tortilla vendors.
Impact on Employees and Broader Trends
The app’s influence extends to employees within tortilla shops, significantly impacting their interaction with financial services. Workers such as Maria Adelaida Francisco, who previously had no experience with financial applications, are now using the app for personal transactions like paying utility bills. This shift toward digital solutions is designed to alleviate historical fears related to paperwork, debt, and taxes, which have traditionally deterred many from engaging with banking services. The broader acceptance of fintech solutions within Mexico is reflective of a regional trend. According to a study by the Inter-American Development Bank and Finnovista, Mexico accounts for 20% of Latin America’s fintech ventures, trailing only Brazil. The rapid growth in the fintech sector across Latin America and the Caribbean, evidenced by the quadrupling of startups from 2017 to 2023, underscores the significant developments taking place.
Despite these advancements, challenges remain in achieving full financial inclusion for tortilla makers. Lopez Garcia highlights that skepticism from traditional banking institutions continues to pose a barrier. Banks have been reluctant to engage with the tortilla industry due to its informal nature and the perceived risks. The ongoing efforts to overcome these barriers and integrate a substantial segment of the Mexican economy into the digital financial landscape are critical. While the journey is fraught with challenges, the introduction of this mobile application symbolizes a pivotal step toward addressing the limitations of the informal economy by providing new financial tools.
Potential for Broader Economic Impact
The app has significantly influenced workers in tortilla shops, transforming how they interact with financial services. Employees like Maria Adelaida Francisco, who previously had no experience with financial apps, now use it for tasks such as paying utility bills. This move towards digital finance helps alleviate fears about paperwork, debt, and taxes that have long deterred many from banking services. The growing acceptance of fintech in Mexico reflects regional trends. A study by the Inter-American Development Bank and Finnovista reveals that Mexico holds 20% of Latin America’s fintech ventures, second only to Brazil. The fintech sector’s rapid growth in Latin America and the Caribbean, illustrated by the quadrupling of startups from 2017 to 2023, highlights ongoing significant changes.
However, challenges persist in fully achieving financial inclusion for tortilla makers. Lopez Garcia notes that traditional banks remain skeptical, hesitant to engage with the informal tortilla industry due to perceived risks. Overcoming these barriers to integrate a large segment of the Mexican economy into the digital financial world is crucial. Despite the obstacles, this mobile app marks an essential step in offering new financial tools and addressing the limitations of the informal economy.
