Nubank Expands Cash Services in Mexico through Strategic Partnership
Brazilian fintech giant Nubank, backed by Warren Buffett, has taken a significant step forward in its Mexican expansion plans. The digital lender has entered into an agreement with Oxxo, a leading convenience store chain in Mexico, to broaden its cash deposit and withdrawal network in the country.
Scaling Operations in Mexico
Nubank, one of the largest firms in Latin America by market value, has been focused on scaling its operations in Mexico and Colombia after achieving remarkable success in its home market, Brazil, where it boasts over 100 million customers. While Nubank’s Brazil operations are largely digital, the lender has adopted different strategies to grow in Mexico, where cash remains a dominant payment method.
Enhancing Customer Experience
The partnership with Oxxo will enable Nubank’s over 9 million customers in Mexico to access cash services at Oxxo’s extensive network of over 22,000 stores across the country. This move will push Nubank’s total presence in Mexico to over 30,000 stores, including previous partnerships. Starting Tuesday, customers will be able to withdraw cash using their Nubank cards at Oxxo stores, while the option to deposit cash into a Nubank account will be available in the coming months.
Market Impact
Citi analysts have hailed the agreement as “positive” for Nubank, as it will expand access to the lender’s client base in Mexico. While they acknowledge that the partnership may come at a cost, they believe it reaffirms Nubank’s commitment to offering cash services at scale, thereby reducing its competitive disadvantage with incumbent banks in Mexico.
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