SAO PAULO (Reuters) – Brazilian digital lender Nubank has signed an settlement with Mexican comfort retailer chain Oxxo, run by FEMSA, to increase its money deposit and withdrawal community within the North American nation, the companies introduced on Monday.

WHY IT’S IMPORTANT

Warren Buffett-backed Nubank, one of many Latin America’s largest companies by market worth, has been aiming to scale its operations in Mexico and Colombia after rising in Brazil, its residence market, the place it has greater than 100 million clients.

Whereas Nubank’s Brazil operations are practically absolutely digital, the lender has been utilizing totally different methods to develop in Mexico, the place money stays a prime fee technique.

BY THE NUMBERS

The deal will permit Nubank’s greater than 9 million clients in Mexico to realize entry to Oxxo’s over 22,000 shops throughout the nation, Nubank mentioned, pushing the lender’s complete presence in Mexico to over 30,000 shops, together with earlier partnerships.

Money withdrawals with a Nubank card will grow to be accessible at Oxxo shops in Mexico from Tuesday, whereas the choice to deposit money to a Nubank account will begin “in the subsequent months,” Nubank mentioned.

MARKET REACTION

Citi analysts mentioned the settlement is “positive” for Nubank, as Oxxo’s community will increase entry to Nubank’s consumer base in Mexico.

However they mentioned can be “likely costly” and famous that it’s not unique, as Oxxo already presents capabilities for different massive banks in Mexico.

“We believe it re-affirms Nubank’s commitment to offer cash-in/out capabilities at a scale, reducing a competitive disadvantage with incumbent banks in Mexico,” the analysts, together with Gustavo Schroden, wrote in a report back to shoppers.