E-fectivo, Electronic Payments in a Mexico’s Semi Urban Community.
To implement our solution E-fectivo with a Saving Bank (Saving Cooperative) in a Semi Urban Zone (less than 50,000 inhabitants) to increase financial inclusion or microenterprises and low-income consumers. A direct impact is the development of local economies among microenterprises, local producers and consumers, including beneficiaries from governmental programs. There are 12 million people without financial services in the rural and semi urban zones of Mexico.
In order to implement our MVP and comply the Mexican financial regulation, we are raising US$175,000 to carry out a pilot project in a semi-urban community to reach 300 microenterprises and 3,000 consumers with the participation of a saving cooperative in a period of four months. The pilot project will be supervised by Federal Financial Authorities, including the use of blockchain (Stellar) as an immutable record of transactions.
- • Since July 2019, we have an active campaign to raise US$190,000 to fund our complete project, we have raised US$15,000 USD from a Mexican angel investor. Our goal is to obtain this funding in the first semester of 2020.
- • During the first month of the pilot project we will carry out a detailed study of behavior and preferences of microenterprises and consumers. This is very important because Mexican culture promote the use of fiat versus electronic financial services, including informal economy and tax issues. A team of 11 persons will interview 250 consumers and 70 microenterprises.
- • In the second month, we will have a team of 31 persons to subscribe current partners of a saving bank/cooperative with the following goal: 200 microenterprises and 2,000 consumers. The team will be trained in the management of objections of consumers and microenterprises. Some economic resources will be invested in economic incentives and a limited number of smartphones to facilitate this process. During operation phase the subscription of additional users will be promoted, we are planning to have 100 more microenterprises and 1,000 more consumers.
- • During the third and fourth months of the pilot project, E-fectivo’ service will be implemented to allow consumers pay their shopping in the microenterprises. The minimum payment volume is expected to be 25,500 transactions. A team of 8 persons will be available to support users and solve problems and claims.
- • Finally in the fourth month, an impact evaluation will be documented to record the benefits and impacts for microenterprises and consumers, and the opportunities for fostering local economies.
Consumers subscribed to E-fectivo will be able to pay in microenterprises. They will not need to go a branch office or ATM to withdraw cash, even they could be pay the public transport if they need to go to get money without a special implementation. Owners of public transport could be partners of a saving cooperative.
Microenterprises will reduce the use of cash, minimizing physical losses and thefts. They will also be able to pay suppliers (other microenterprises or local producers) that are subscribed to E-fectivo, including large companies and governmental agencies if the saving bank have special agreements.
E-fectivo is designed as a wallet, first users will use pesos. But in a short term a loyalty mechanism will be implemented as a second asset. In Mexico, the use of crytocurrencies is regulated by the Central Bank; we will be able to promote the use of Stellar’s lumens if the Banco de Mexico grants the public use approval. This pilot project could show the technological and security viability to use Stellar in an authorized financial service.
Currently our MVP is connected to the Stellar’ sandbox. Our first step is the implementation of instances of Stellar in special servers localized in Mexican territory. When Federal Financial Authorities and the Mexico’s Central Bank authorize the use of the Stellar network, this instance servers would be connected to Stellar if it possible.
Right now our E-fectivo app runs on android and the API servers is running in Microsoft Azure. In the future there will be an OS app and a web page supporting Windows, Android and OS.
Promotional Video in Spanish:
We are a group of seasoned professionals of Mexican IT Industry that have recently incorporated a new company to provide innovative and secure payment solutions. In the team, there are two serial entrepreneurs, a former Microsoft officer, two architects and developers, and an innovation consultant.
Our target is the Mexican Saving Banks (Saving Cooperatives) or Social Banks which have a competitive presence in semi-urban and rural areas with 12 million people without financial services. There are 194 social financial institutions in Mexico: 159 saving cooperatives and 35 SOFIPOS with 11.4 million users. In average they have less than 30,000 partners/customers. They face a very competitive financial market with commercial banks, fintechs and startups.
We developed an MVP for electronic payment based in blockchain (Stellar), NFC, biometrics, AI and data science. We have a first round of seed capital of US$15,000. We have validated with governmental agencies and some saving banks have identified the opportunity to preserve and increase their customers, fostering the financial inclusion of microenterprises and low-income consumers, in addition this could help to consolidate local economies.