Visa Inc. has partnered with Blue Label Mexico to bring electronic payments to hundreds of thousands of small merchants.

According to Mexico's Central Bank, there are about 640,000 point of sale terminals in Mexico. In the first 18 months, this partnership could generate an increase in the number of Mexico's current point of sale levels up to 25%, potentially adding about 150,000 terminals, says Luz Adriana Ramirez, country manager for Mexico at Visa.

Small merchants will "have the ability to accept electronic payments cards, like debit, credit and government cards, as well as provide the value add services, such as airtime top-up and bill payment," she says.

There are approximately 125 million cards in Mexico with 79% being debit and 21% credit products, according to the latest data from Mexico's Central Bank from April to June 2013.

Merchants will see more traffic and sales in store because of the added payment acceptance, says Ramirez, and consumers can reduce their dependency on cash.

"It's not only the changes in the retail  environment, but we're looking at mobile point of sale technology that is bringing down the cost of acceptance for small retailersÂ…and the government is playing a role as well because they're actively supporting this," Ramirez says. In Mexico, merchants "needed someone to bring an acceptable terminal to them and then have a network to support them," she says.

Mexico's small and midsize merchants produce 52% of Mexico's gross domestic product and account for more than 70% of job opportunities in the country, according to data from the Instituto Nacional de Estadística y Geografía in 2009.

Blue Label Mexico is a joint venture between Blue Label Telecoms Ltd., a prepaid airtime provider, and Grupo Bimbo, a provider of baked goods.

Grupo Bimbo has put together a network of more than 1,000 sales agents to visit the more than 700,000 small merchants that carry the company's baked goods to train the merchants on how to use the point of sale terminals, says Ramirez. These "promoters" also provide advertising and customer support, she says.

Partnering with these brands could help Visa capture marketshare as it expands internationally.

Planet Payment, an international payment processing services provider, is working with Visa to build the processing platform for merchants in Mexico. The cost of the system for Mexican merchants is arranged by the acquirer, which is Banamex for Grupo Bimbo.

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