OXXO

OXXO is a chain of convenience stores in Mexico, owned by the beverage and retail group FEMSA and founded in Monterrey in 1978. With more than twenty thousand outlets it is the largest retail chain of its kind in Latin America and has shops in most Mexican towns and neighbourhoods. In payments, the name refers to the use of those shops as a place to pay in cash: for an online order, a utility bill, a loan instalment or a deposit to a bank account or wallet.

For e-commerce merchants, OXXO is a local payment method offered at checkout alongside cards and bank transfers. It matters because a large part of the Mexican population has no credit card, prefers cash or is reluctant to enter card details online. Paying at OXXO lets these customers buy from online merchants. It is the Mexican counterpart of the Boleto in Brazil and of convenience store payment in Japan.

The method is a form of voucher payment. At checkout the shopper chooses OXXO, and the merchant's payment provider generates a voucher showing the amount, an expiry date and a numeric payment reference with a barcode. The shopper receives it on screen and by email or text message.

The shopper then goes to any OXXO store, shows the voucher on a phone or on paper, and pays the amount in cash at the till, plus a small service commission charged by the store. The cashier scans the barcode or keys in the reference, and the shopper receives a printed receipt. OXXO reports the payment to the payment provider, which notifies the merchant, typically by webhook notification, so that the order can be released. Depending on the provider, confirmation may arrive within minutes or by the next business day.

From the merchant's perspective this is an asynchronous payment. The order is created first and paid later, or never: many vouchers expire unpaid. Merchants reserve stock for a limited time, send reminders, and set the voucher's validity, usually a few days. Each voucher is subject to a maximum amount, so the method suits everyday purchases more than high-value ones.

• No chargebacks. A cash payment cannot be disputed through a card network, so there is no chargeback risk, and fraud by stolen credentials does not arise.
• Refunds need another route. Cash cannot be pushed back to the till. A refund is made by bank transfer to an account the customer supplies, by store credit or by another payout method, which adds work.
• Lower completion. A share of shoppers who generate a voucher do not pay it, so conversion from order to payment is lower than with cards.
• Access through providers. Merchants, especially foreign ones, normally reach the method through a payment service provider that holds the relationship in Mexico and settles to the merchant, often in another currency.

The method is not suited to subscriptions, since each payment needs a visit to a shop, though some businesses use it for prepaid top-ups that are then drawn down.

The chain's role extends well beyond online orders. Customers pay electricity, water, telephone and television bills at the till, a form of bill pay used by households without bank accounts. Under Mexico's banking agent rules, stores act as correspondents for a number of banks, accepting cash deposits to accounts and card repayments, and they pay out and collect remittances and sell prepaid mobile credit and gift cards.

Fintech companies rely on the network as a cash-in point. Wallets, neobanks and lenders in Mexico typically let customers load money or repay loans by presenting a reference at OXXO, a cash-in channel that makes digital accounts usable for people paid in cash. FEMSA has developed its own financial products on the same base: a basic debit card account launched with a bank partner in the 2010s, and later the Spin by OXXO digital wallet and card, whose users deposit and withdraw cash at the stores.

Mexico remains a cash-heavy economy, and a significant share of adults are unbanked. Cash vouchers, of which OXXO is by far the best known, have therefore been a standard feature of Mexican online checkouts alongside cards and transfers through SPEI, the central bank's interbank payment system. For many merchants the alternative for cash customers would be cash on delivery, which is costlier and riskier to operate.

The balance is shifting gradually. Card ownership, account-based wallets and instant transfers are growing, and the Bank of Mexico has promoted QR-based and phone-number-based transfers on SPEI. Cash vouchers nevertheless keep a substantial place, particularly for lower-income shoppers, for first-time online buyers, and for digital goods such as game credits and streaming subscriptions paid for in advance.

OXXO is a retailer, not a bank. When its stores accept deposits or payments for a bank, they act as that bank's agents under rules supervised by the National Banking and Securities Commission (CNBV), with the bank remaining responsible to the customer. Payment collection for merchants is carried out under commercial agreements with payment aggregators, which are themselves subject to Mexican rules on payment processing. FEMSA's wallet business operates through a regulated entity under Mexico's financial technology law, which created licences for electronic payment fund institutions.

• OXXO
• FEMSA