Citi Targets Latin America with M-Payment Service for Small Business Buyers, Suppliers (Feb. 19, 2013)
Feb. 19, 2013
Citigroup Inc. plans to expand a mobile payments service it has developed for its small-business customers to replace large cash payments in underbanked regions into Latin America. Citi recently launched a pilot of Mobile Collect in the Dominican Republic, targeting approximately 80,000 cash-based grocery stores and other small businesses and their suppliers. Through collaborations with local microfinance operator Banco ADOPEM, participating small businesses open an account and pay suppliers—that must be Citi corporate customers—using technology local payment administrator GCA Systems provides. Participating in the pilot provides a more efficient way for Citi customers Philip Morris Dominicana and Frito Lay Dominicana to receive payment from distributors, “even in communities with low levels of banking,” said Máximo Vidal, Citi general manager in the Dominican Republic. Citi, which already offers Mobile Connect in South Korea, India, China, Mexico and the Philippines, next plans to introduce the service in other Latin American countries, a Citi spokesperson tells Paybefore.
Citi’s Mobile Collect aims to reduce the costs associated with “securing large amounts of cash” in markets where small businesses lack traditional bank accounts, Rick Oglesby, a senior analyst with Aite Group, tells Paybefore. Moving payments from less secure cash to an electronic format in such environments represents “a solid value proposition” for suppliers, he says. But adoption requires marketing and education to get distributors and suppliers at both ends to participate, which can be “a tough nut to crack,” Oglesby adds.