From CoDi to DiMo: Mexico’s second attempt to grow digital payments

First came CoDi, or “Cobro Digital” (Digital Collection). But it didn’t take off. The system, launched by the Bank of Mexico to speed up instant payments in the country, was pioneering even before Pix came online in Brazil a year later. But it was not successful, and today most Mexicans are unaware of what it entails. Now, with a second try, DiMo turns one in Mexico, yet another initiative to promote online payments in Latin America’s second-largest economy.

DiMo, short for Mobile Money, aims to gain traction among Mexicans by using only mobile numbers for money transfers. However, like CoDi, it has some limitations: both are focused on the banking population, as indicated by specialists.

However, this time it is expected to be more open towards fintech. Currently 19 financial institutions can provide the service. Fifteen more are in the process of being set up, central bank officials said. Recently, the regulator said there were already over 7 million accounts registered for DiMo, which facilitates money transfers using only the recipient’s mobile number.

“As DiMo becomes more widely available through financial applications, the adoption of electronic payments will be facilitated, simplifying the process of sending transfers,” said Victoria Rodríguez Ceja, governor of the Central Bank.

The CoDi case in Mexico

Instant payments that aim to reduce the use of cash while promoting greater financial inclusion are advancing across Latin America. But not at the same rate in all countries.

The numbers tell the story of CoDi, introduced in 2019. Unlike Pix, which was immediately available to hundreds of financial institutions, from banks to fintechs to payments providers in Brazil, CoDi in Mexico was supported by only a handful of traditional banks.

Over the course of four years, the system recorded less than $1 billion in total transactions. It has 1.9 million accounts that have made at least one payment. This contrasts sharply with Pix’s notable success in Brazil. Over 140 million users and a monthly transaction volume of more than $400 billion.

“In the case of Mexico and CoDi, the system is highly concentrated. It was not successful for various reasons,” says Ignacio Carballo, head of alternative finance at Americas Market Intelligence. “Among others, cash usage in Mexico is immensely higher than in other regional economies.”

Fintech now on board

Taking inspiration from past efforts, this time DiMo has been expanded to include financial technology institutions. Leading Brazilian fintech Nubank, for example, announced plans to integrate DiMo into its Mexican app earlier this year.

“We see in DiMo a great opportunity to simplify money transfers, reduce the use of cash and promote the digitalization of the country’s economy,” commented Ivan Canales, who leads Nubank’s operations in the country. “This opens up the possibility of sending and receiving money using the recipient’s ten-digit mobile number as a reference, without commissions or costs for users,” he pointed out.

In a recent study on the growth of mobile banking in Mexico, BBVA Mexico predicts an increase in mobile transactions in the coming years. By 2025 they will represent 18% of the total and by 2030 23%. The bank was the first to enable DiMo in June 2023.

• David is a Latin American journalist. He regularly reports on the region for global news organizations such as The Washington Post, The New York Times, The Financial Times and Americas Quarterly.

  He worked for S&P Global Market Intelligence as a Latin America financial reporter and gained experience on fintech and market trends in the region.

  He lives in Buenos Aires.

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