Effect of the rejection of Cacao: Oyster will close its debit accounts


Within the regulators of the Mexican financial system there is concern about the effects of the rejection of Cocoa Paycard to operate as an electronic payment funds institution under the terms of the law to Regulate Financial Technology Institutions, or Fintech Lawand at the same time, the consequences of the denial of the request to this entity begin.

Among these effects is the change in the business model of entities that had an agreement with Cocoa Paycard for the latter to manage electronic payment fund accounts. One of these companies is the Oyster platform, which this Tuesday, May 17, announced its decision to close all its accounts and debit cards. master cardboth physical and digital, to focus on the development of remote payment infrastructure.

“Oyster has decided to change its main line of business and focus 100% on evolving its financial platform and starting to develop a strong remote payment infrastructure. However, this approach brings with it tough decisions, so as of 27 May 2022, all Mastercard debit accounts associated with Oyster profiles, both physical and digital, will be closed,” the firm explained in a statement.

The platform Oyster is an entity (still) focused on offering financial services to small and medium-sized companies, especially with debit and credit cards. For the debit product, the firm used the infrastructure of Cocoa Paycardwhich was responsible for the operation of the accounts, a model known as fintech as a service.

In the second half of 2021, Cocoa Paycard received notification that it would not be authorized by the National Banking and Securities Commission (CNBV) to operate as an institution of electronic payment funds, for which it had to refrain from opening new accounts and would have to focus on the conclusion or assignment of the operations regulated in said law, as it was an entity that operated under the protection of the eighth transitory article of the regulations.

Nevertheless, Cocoa Paycardbeing one of the main providers of fintech as a service, left various entities with which it had an agreement to manage the accounts of such firms such as Oyster, BNEXT, Tauros and Warp, among others, in limbo.

After the rejection of the authority to Cocoa Paycardthe division of the firm focused on technology for card payment methods, was acquired by the Brazilian Dock, with the intention of deepening in the Mexican market.

Sources indicated to this medium that Oyster has looked for options to acquire one of the 33 platforms authorized by the CNBV, especially electronic payment funds, in order to continue with its business model, but apparently the options have run out.

Change of model

Without touching the regulatory issue, Oyster He explained that the change in the entity’s business model is due to the progress of digitalization, which makes it necessary to strengthen the remote payment infrastructure of companies.

“The growth in electronic commerce has been constant in recent years, even before the pandemic began, so its potential development is imminent and unstoppable. This leads businesses to take technological measures necessary for their survival and expansion of payment methods is the minimum essential requirement to achieve this,” said Oyster, which since 2019 has supported more than 60,000 entrepreneurs with solutions.

The firm reported analyzes indicating that seven out of 10 buyers already feel safe making transactions online and from a distance. “Strengthening remote payment platforms is of the utmost importance and supports this great decision, which Oyster take, to empower the finances of our country’s businesses.

What is the future of Oyster accounts?

Oyster He pointed out that, before the closure of the accounts and debit cards, the users of this platform must transfer their existing funds to a new account that they own.

For those companies that do not have an account to transfer resources, the firm offered two options as an alternative:

  • Open an account with the Fondeadora platform.
  • Go to Hey Banco to open a Hey Negocios account.

In this context, Oyster detailed the steps to follow to carry out the necessary transfers:

  • Transfer the debit funds to a new account at another financial institution before May 27, 2022 at 4:00 p.m.
  • In case of not withdrawing the funds before that date, it will be necessary to start the process to recover them, so you must go to the legal area of ​​Cacao Paycard.
  • As of May 27, Oyster will no longer be available for use. “You will still be able to log in to your profile and check your debit and credit balance, but with limited functionality through our web platform.”
  • The payment of services will be available until next May 27.
  • Even if the profile has a balance, recurring payments can no longer be made, as the account will have been cancelled.

Oyster pointed out that it will seek to strengthen its payment solutions to promote online transactions of legal entities, for which it will offer a collection link generator service with which payments with debit and credit cards, cash deposits and transfers can be accepted. SPEI.

Meanwhile, the regulators are still analyzing the impact left by the rejection of Cocoa Paycard and its effects for the financial system in Mexico.

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