OXXO is best known as a chain of Mexican convenience stores, but it’s also a popular online payment method used for paying bills and settling online purchases. Founded in 1978 in Monterrey, Mexico, OXXO is a part of beverage and retail giant FEMSA and is one of the largest convenience store chains in Latin America, with thousands of stores across Mexico and with locations in Colombia, Chile, and Brazil.

In addition to its retail operations, OXXO is known for its payment system for online transactions. Via the OXXO payment platform, customers can pay for online purchases in cash at the more than 20,000 OXXO store locations. This is a popular payment method in Mexico, particularly for people who prefer not to use credit cards or who do not have access to banking services. OXXO’s recent move into digital payment options and online services marks a key shift amid growing interest in digital transactions.

Below, we’ll cover what businesses must know about accepting OXXO as a payment method in Latin America: how it works, who uses it, how it can benefit businesses, and how to apply to work with this popular Latin American brand.

What’s in this article?

• How does OXXO work?
  
• Where is OXXO used?
  
• Who uses OXXO?
  
• Benefits of accepting OXXO
  
• OXXO security measures
  
• Applying to work with OXXO
  
• Alternatives to OXXO
  

How does OXXO work?

The OXXO system caters to customers who prefer cash transactions or lack access to digital payment methods. Its integration into ecommerce platforms combines digital convenience with familiar, traditional payment practices. Here is how OXXO works as a payment method:

• Selecting OXXO as a payment method: When a customer shops online on a platform that integrates OXXO, they can select OXXO as their payment method at checkout. This is ideal for customers who don’t have access to electronic payment methods or prefer to pay in cash.

• Generation of a payment voucher: Once a customer chooses OXXO, the system generates a payment voucher unique to the transaction. This voucher includes a barcode that contains the details of the purchase. Customers can print the voucher or save it on their smartphone or tablet.

• Cash payment at OXXO stores: After a customer gets a payment voucher, they can present the voucher at any OXXO store and pay for their purchase in cash. The OXXO cashier will scan the barcode for the purchase amount and then accept and process the cash payment.

• OXXO e-wallet app: OXXO offers an e-wallet app that works with any mobile device, allowing customers to complete transactions by scanning a QR code on the business’s device.

• Payment confirmation: After the payment is complete, the system sends the online business a notification confirming the transaction, after which the business can proceed with order fulfillment. This process takes up to one business day.

Where is OXXO used?

OXXO has expanded into other Latin American markets such as Colombia, Chile, and Brazil, reflecting a thorough understanding of the region’s retail and financial landscapes. The business’s growth in these areas underscores the enduring relevance of cash transactions in Latin America.

In Mexico, OXXO’s home market, the brand’s deep penetration is tied to the country’s customer habits and retail landscape. Many Mexicans rely on cash transactions because of limited access to banking services and credit facilities. OXXO stores, which are in urban and rural areas, cater to this need with a cash-based payment option for online purchases.

In Colombia, Chile, and Brazil, OXXO’s presence and its payment system tap in to similar market dynamics. As in Mexico, large portions of these countries’ populations are underserved by traditional banking systems, and OXXO addresses this gap with its accessible and cash-friendly payment option.

Across Latin America, businesses have seen a growing push for retail modernization alongside a persistent reliance on cash transactions. OXXO provides a convenient and modernized retail experience while bridging the gap between ecommerce and cash economies. Regulatory conditions in these countries have also influenced OXXO’s adoption, with Latin American governments generally supporting initiatives that promote financial inclusion and accessibility. OXXO achieves these goals by providing an alternative payment method for those without bank accounts or credit cards.

Who uses OXXO?

OXXO’s payment system caters to Mexico’s unique payment habits and ecommerce landscape. It serves two key customer segments.

• Unbanked population: Mexico’s unbanked population, estimated at 63% of adults, makes up a significant portion of OXXO’s customer base. This segment can use OXXO to pay utility bills and for online purchases at one of the more than 20,000 stores in OXXO’s network.

• Ecommerce shoppers: OXXO caters to ecommerce customers with its cash payment option for online purchases. Mexico’s domestic ecommerce market grew 23% from 2021 to 2022, according to the Mexican Online Sales Association, and OXXO’s method of generating payment vouchers that can be paid out in cash at OXXO stores has become a popular payment option. This payout system caters to a broader cultural inclination toward using vouchers for purchases: many Mexicans, whether or not they have a bank account, debit card, or credit card, often choose voucher payment methods such as OXXO instead.

Benefits of accepting OXXO

Businesses that accept OXXO as a payment method may see these benefits:

• Expanded customer base: Businesses that include OXXO as a payment method can tap in to a substantial market segment that doesn’t use traditional banking services, including the unbanked and underbanked population. This customer base is often overlooked by businesses relying solely on electronic payment methods. Accepting a payment method that works for these customers allows businesses to be more inclusive and reach a wider demographic that includes people of different economic backgrounds.

• Enhanced transaction security: Cash transactions through OXXO reduce the risk of chargebacks, a common issue with credit card transactions. When customers pay in cash, the transaction is final, which provides a layer of financial security for the business. This feature can be particularly valuable in markets where fraud and chargeback rates are a major concern.

• Increased online sales: OXXO can boost online sales by facilitating online purchases for customers who are hesitant or unable to use digital payment methods but might be more inclined to participate if they can pay for their online purchases in cash. OXXO provides a bridge between traditional retail habits and the growing ecommerce sector, tapping in to a customer base that is increasingly interested in online shopping but prefers cash payments.

• Improved customer satisfaction: OXXO aligns with customer preferences in Latin America and can enhance the overall shopping experience as a result, creating higher customer satisfaction and increasing loyalty among customers who appreciate the convenience and familiarity of using OXXO. For customers choosing between online retailers, having the option to use a familiar and trusted payment method can be a decisive factor.

• Better brand perception: By using OXXO, businesses can demonstrate their commitment to cater to local preferences and economic conditions, possibly boosting their brand perception.

OXXO security measures

OXXO’s security measures help create a protected transaction environment. Using OXXO as a payment method introduces a layer of security to unbanked customers and those with a preference for cash payments. OXXO uses these security measures to verify transaction details and ensure payments are recorded accurately:

• Unique barcode vouchers: Each OXXO transaction generates a distinct barcode voucher, ensuring every payment is tied to a specific purchase. This minimizes fraud risks and payment processing errors.

• Controlled payment validation: The in-store OXXO payment process involves a validation step in which the cashier verifies the voucher details before accepting cash. This step adds an additional check to prevent errors or fraudulent vouchers.

• Direct communication channels: OXXO maintains direct communication channels with businesses to confirm payment transactions, enhancing the overall security and reliability of the payment process.

• Cash payment: Though there are security risks associated with handling cash, paying in cash provides an alternative for those concerned with digital security. Paying in cash eliminates the need for electronic payment data or sensitive financial information and bypasses the risks associated with online payment fraud.

Applying to work with OXXO

Businesses need to complete these steps to work with OXXO as a payment method:

• Creating an account: First, businesses must sign up for an OXXO account and go through a setup process. OXXO guides businesses through this process and provides hardware to work with its system.

• Integrating a payment gateway: Businesses must sign up with a payment gateway that supports OXXO, such as Stripe. This gateway acts as a mediator and facilitates the processing of OXXO payments. Different gateways may be compatible with different features. Platforms such as Stripe, for example, can process only one-time payments via OXXO and not recurring subscription payments. Gateways that require additional software or hardware to set up may send businesses the necessary tools to work with their system.

• Customizing payment interface: Businesses can customize their customer-facing UIs for OXXO checkouts on platforms such as Stripe, incorporating features such as brand images and colors on the voucher page.

• Creating a checkout session: To create a checkout session with OXXO, businesses must include “oxxo” in the list of payment method types and ensure all line items use the peso (MXN) currency. Businesses also have the option to set an expires_after_days parameter, which determines the number of days before the OXXO voucher expires.

• Accepting payments: Businesses can accept payment for OXXO purchases by scanning the generated voucher and collecting the listed purchase amount in cash. In some cases, businesses may ask customers to scan a QR code with their mobile phone to complete the transaction.

• Monitoring payment status: Because OXXO operates on a delayed notification payment method, businesses should use methods such as webhooks to monitor OXXO payment status for order fulfillment.

Alternatives to OXXO

Businesses in Latin America have several alternatives to OXXO. Each country where OXXO operates has a unique payment landscape, financial infrastructure, and set of local preferences that inform which payment methods are most popular. Here’s an overview of some popular alternatives to OXXO, including how and where they’re used:

• Rapyd: In Mexico, Rapyd offers a similar service to OXXO with a network of over 150,000 cash-over-the-counter locations, including 7-Eleven and Walmart, where customers can pay for digital orders in cash.

• Mobile instant payments: Mobile platforms such as BBVA Wallet (popular in Mexico, Colombia, Peru, and Chile), PagSeguro (popular in Brazil), and Mercado Libre (popular in Argentina) allow customers to pay for purchases using their mobile phones.

• Electronic funds transfer (EFT): Online bank transfers are a common alternative payment method in countries such as Colombia, where services such as PSE (Pagos Seguros en Linea) let customers pay for online purchases from their bank accounts.

• Cash cards: Prepaid cash cards, which can be loaded with funds and used like credit cards, are a popular payment alternative for customers without bank accounts.

• Efecty: Efecty is a similar service to OXXO. Purchases made online via Efecty generate vouchers that can be paid in cash at Efecty locations. This service is popular in Colombia for paying utility bills, making online purchases, and transferring money.

• Pix: Pix is a popular instant payment system in Brazil that processes transactions via QR codes or transaction IDs.

• SafetyPay: Like OXXO, SafetyPay lets customers pay for online purchases in cash. Customers can select SafetyPay as the payment method during an online checkout process. Then, customers can complete the payment via direct bank transfer or by generating a unique payment code and going to an in-person SafetyPay location where they can pay for their purchase in cash.

• Webpay: Webpay by Transbank is a Chilean payment method for online purchases that allows customers to pay from their bank accounts or via credit card through Webpay’s secure servers.

• SPEI: SPEI is a local Mexican interbank electronic payment system used primarily for immediate fund transfers between bank accounts.

• Other cash payment solutions: Cash payment solutions are a major category of payment method across Latin America, with each country hosting its own preferred local options, such as Rapipago in Argentina, Boleto in Brazil, Servipag in Chile, Baloto in Colombia, PagoEfectivo in Peru, and Redpagos in Uruguay.