Leading Mexico’s Digital Revolution
By Niki Stojnic
May 2024
It’s not easy overhauling an entire country’s card payment landscape. But that’s what the digital payments and commerce company Clip has been thriving at for 12 years, with founder, chairman and CEO Adolfo Babatz at the helm.
Clip’s suite of hardware and software products help streamline digital payments and commerce for businesses in Mexico — a much-needed service in an ecosystem dominated by the country’s largest banks. “Obtaining a payment terminal via a traditional financial institution is a very lengthy and costly process, taking up to 121 days [for] a product that accepts only a couple of payment methods,” says Adolfo. “With Clip, in less than five minutes a merchant has more than 25 payment methods available.” Before adopting Clip, he notes, 92% of Mexico’s merchants did not accept digital payments.
The company is expanding this approach, allowing merchants to accept online payments in just a few minutes via WhatsApp, email or text message, or to apply for a loan with three or four taps on their Clip app. For developers or financial institutions, Adolfo says, Clip is providing straightforward application programming interfaces and software development kits to integrate into their systems.
Clip reached unicorn status in 2021. There have been a few key moments that set the company up for that kind of success: The inaugural funding round of $1.5 million in 2012 positioned it as the first Mexican tech startup to attract Silicon Valley investment to Mexico. General Atlantic’s $25 million investment in 2016 was, at that time, the largest equity round ever for a Mexican tech company. And during the COVID-19 pandemic, Clip reversed a steep initial decline in transactions, resuming a pre-pandemic growth trajectory and initiating a shift to more diversified product offerings. “During the pandemic,” Adolfo notes, “businesses that integrated Clip reported up to a 300% increase in sales.”
Clip’s products help streamline digital payments and commerce in an ecosystem dominated by the country’s largest banks.
Clip is also involved in a push for regulatory changes that would address the limited competition in Mexico’s card payments market. While it would invite more competition, Adolfo says he would welcome a level playing field that’s not unduly influenced by monopolies and oligopolies. “We recognize the potential to benefit the entire sector and, consequently, the end-user,” he says.
Since its inception, Clip’s business model has remained steadfast, with a management philosophy “centered around empowering individuals to excel and contribute effectively to our collective goals,” Adolfo says. That involves recruiting exceptionally skilled leaders, encouraging autonomy over micromanagement, building trust and accountability, performance-based compensation, and promotions and rewards based on both results and alignment with company culture.
With those pillars solidly in place, Adolfo says the company’s immediate focus is on expanding Clip’s presence across a variety of merchant categories and working to equip them with tailored products and services. “Our country represents a ‘greenfield’ opportunity in terms of digitalization,” he says. “We are positioned at the brink of one of the world’s most significant opportunities to digitize an entire economy, and Clip is leading this charge. The prospect of being at the forefront of Mexico’s digital revolution is incredibly exciting.”