SAO PAULO (Reuters) – Brazilian digital lender Nubank has signed a deal with FEMSA-operated Mexican convenience store chain Oxo to expand its cash deposit and withdrawal network in North America, the companies said on Monday.
Why is it important?
NuBank, backed by Warren Buffett, is one of the largest companies in Latin America by market capitalization, and after growing in its home base of Brazil, where it has more than 100 million customers, it aims to expand into Mexico and Colombia. There is.
Although NuBank's Brazilian operations are almost completely digital, the company is employing different strategies to grow in Mexico, where cash is still the primary payment method.
Look at the numbers
The partnership will give NuBank's more than 9 million customers in Mexico access to more than 22,000 Oxo stores nationwide, bringing the company's presence in Mexico to 30,000,000 including past partnerships. Nubank said it will be more than just a store.
Cash withdrawals with Nubank cards will be available at Oxxo stores in Mexico starting Tuesday, and the option to deposit cash into Nubank accounts will launch “in the following months,” Nubank said.
market reaction
Analysts at Citi said the agreement is “positive” for NuBank as Oxo's network will expand access to NuBank's customer base in Mexico.
However, they said it was “likely to be costly” and pointed out that this is not exclusive as Oxxo already offers the functionality to other large banks in Mexico.
“This reiterates NuBank's commitment to providing large-scale deposit and withdrawal capabilities and reducing its competitive disadvantage to Mexico's incumbent banks,” analysts including Gustavo Schroden said in a note to clients. I think it will be confirmed.”
