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Digital banking Act. 18 Aug 2017

Salazar: “Only 10% of SMEs have a website. There's an opportunity out there”

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PayPal's membership of the National Entrepreneurs' Institute network has provided them with ongoing insights into what new companies need and allowed them to innovate to meet these requirements. René Salazar of PayPal is one of the 33 Mexican innovators interviewed for the eBook Hablan los protagonistas (The key players speak).

How is PayPal related to the innovative and entrepreneurial ecosystem in Mexico?

We offer payment services for all kinds of companies, but we focus particularly on SMEs and on the entrepreneurial segment. We do that by helping them build their business. We have an exclusive customer service center for companies, but we also relieve them of the hassle of having to process payments. Our model is very simple. If you're an innovator with an excellent business idea, we'll free you from the hassle of having to process payments.

How does PayPal collaborate with the entrepreneurial/innovator system in Mexico?

We work with several forums. We belong to the Inadem network and we're in contact with organizations so we can work together and support the entrepreneurial ecosystem. We're very interested in seeing it grow. If they grow, we grow too.

What are the most frequent types of businesses and ideas you see from entrepreneurs and innovators?

Mainly services, travel, and a lot of micro-enterprises. But generally speaking, the segments that are growing fast are services and tourism.

Is it possible for a well-established company with its own trajectory to continue innovating?

We're a technology company.PayPal has been innovating in the payments system for over 17 years and we're still continually innovating. If you stop innovating your product will be neither functional nor competitive, particularly in a market where there are new competitors, new players with fresh ideas who are always looking to strike a blow against the ecosystem leader. We're constantly looking for new solutions and ways to make it easier for businesses to collect and pay.

What are the challenges and obstacles facing entrepreneurs in Mexico today?

Launching the business is the first challenge. Many entrepreneurs have excellent ideas but they can't put them into practice because they can't find a way to start them up.

Have you found any examples of obstacles to funding?

If you look at entrepreneurs, you'll see their first source of funding is their friends and family, and that runs out very quickly. What they're looking for are new funding sources. We have a very good product in other countries with which we help entrepreneurs self-finance through the purchases they make.

Is this product available in Mexico?

No, we've implemented it in the United States, Canada, Australia and the United Kingdom, but we have no plans to do so in Mexico in the short term.

How would you define the DNA of the Mexican entrepreneur/innovator?

We see innovators with excellent ideas. Rather than simply creating a business, their ideas tend to deal with ways of improving society in the country and you see that in every one of the products and services they have.

What features define the Mexican entrepreneurial ecosystem?

It's a network of very clever people, with excellent ideas, who are well-prepared, and who wish to improve the situation in Mexico. They have a good knowledge of the products they want to launch. I've been really impressed by the quality of the people and the ideas in this segment.

What's the role of official and non-official bodies in entrepreneurship?

I think we all have the aim of supporting entrepreneurs. The government, private organizations, NGOs, they all –from their own individual standpoint– want to support that growth.

How have the big corporations become involved with this ecosystem and with plans for encouraging entrepreneurship?

We work very closely with entrepreneurs. Throughout its history PayPal has been indebted to the entrepreneurial segment, and we really want to use our products as a way to thank them for trusting in us.

How would you define the financial opportunities for Mexican entrepreneurs today?

They're good, but obviously there are numerous entrepreneurs competing for funding and that means they don't all have the same opportunity. We've focused on payment issues more than on financing.

What trends do you see in the eCommerce sector?

Entrepreneurs have to think carefully about their business model, and today mobile comes first. Many companies open the mobile segment before the normal digital and eCommerce segments. It's important to have excellent service levels in their products, because what they're looking for at the start is to win over large numbers of customers. They should also focus a lot on the millennial segment.

How do you see the future of innovation in this sector in Mexico?

It's going to continue growing significantly.  eCommerce in Mexico is increasing at breakneck speed, even in the non-banking population. Currently only 10% of SMEs have a website. There's an opportunity out there. Now it's easier to have a website and be able to start to register payments almost instantly.

What advice would you give a prospective entrepreneur in this sector?

They should set out to design the best product, really focus on the customer and on the issues they find most complicated, and look for the best alliances. With PayPal, for example, they can relieve themselves of the hassle of making and collecting payments and concern themselves with the product itself.

Isn't it intimidating for an entrepreneur to approach a vast platform like yours?

Anyone can open an account from our website and begin to receive payments. It doesn't need to be a highly digital company. You can do it simply with a rudimentary knowledge of Internet. We have a vendor protection program where we have the responsibility of helping them solve disagreements with purchasers, so we also act as lawyers for entrepreneurs and for their business model.

The giant Internet payments platform is interested in enterprises in which eCommerce is key. Salazar sees mobile services in Mexican SMEs and their need for greater access to technology as a good business niche for people looking to start up enterprises in this sector.

The event held on 21 January was an opportunity to hear the players featured in this eBook. Click here if you'd like to download the entire eBook Hablan los protagonistas: 33 innovadores mexicanos (The key players speak: 33 Mexican innovators).

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