U.S. retail giant Walmart wants to get on top of Mexico's fintech market with its Cashi digital wallet, yet analysts say its drive is strewn with potential pitfalls due to the proliferation of risky clients in the largely untapped market.
Executives at the Walmart unit expect the deal to "unlock Cashi's potential," starting with transfers, withdrawals and remittances while keeping open the option of loans and other financial services in the future.
The Bentonville, Arkansas-based chain expects these operations to contribute more to profitability over the next five years than its core brick-and-mortar retail business. "We have 5 million customers visiting our stores every day and the vast majority don't have access to a financial product, never mind a formal credit product," Herrera said.
"The credit card would be an important change in strategy at Walmart," he said. "It would enter a riskier segment.", Latin America's largest fintech, was 12.2% in February, above the 11.4% average for microfinancing firms, according to official data cited by Brazilian bank Bradesco.
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