Amazon in New Deal to Boost International Business



Mobile payment service for Mexico

Amazon (AMZN) has teamed up with Mexico’s central bank to launch a new mobile payment service in the country, according to a report from Reuters, which could be a huge relief to Mexican consumers, many of who don’t have bank accounts and therefore lack access to many financial services.

A government-backed mobile payment service could help accelerate the adoption of online shopping in Mexico, thereby enlarging Amazon’s market opportunity in Mexico. Growth in Mexico’s retail industry would go a long way toward boosting Amazon’s international retail business.

International revenue jumped 15%

Amazon’s international retail revenue rose 15% YoY to $20.8 billion in the fourth quarter, which ended in December. Alibaba’s (BABA) international retail revenue jumped 23.4% YoY in the December quarter.

Mexico is one of the international markets where Amazon and Walmart (WMT) are battling it out for retail market share. Recently, Amazon has been expanding in Mexico as a challenge to Walmart, which enjoys a significant headstart in the market.

Amazon’s government-backed mobile payment in Mexico would also intensify its competition with Mercadolibre (MELI), a leading Latin American e-commerce and digital payments provider. Mercadolibre is seeking to raise around $1.9 billion in additional capital to expand its business. PayPal (PYPL) is one of the corporate investors participating in Mercadolibre’s fundraising and has committed to inject $750 million in the business. Amazon and PayPal compete in the digital payment space.

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