Raynor de Best
Content expert covering payments and (crypto)currencies
Digital payments landscape in Mexico - statistics & facts
Digital payments in Mexico are characterized by a seer lack of digital transactions in physical stores. Mexico's share of cash ranks among the highest of all countries in the Americas, while credit cards are only used in e-commerce. What digital payment characteristics and payment trends are noteworthy for Mexico?
How to tap into Mexico's unbanked population will be the big question going forward. If successful, Mexico could become of the largest digital payment markets in Latin America. When that happens, however, is not yet clear.
Financial inclusion struggles in Mexico
A big reason for the high market share of cash is the country's largely unbanked population. More than half of the country did not have access to a bank account, with figures being relatively in low-income and rural areas. A relatively low level of education in Mexico adds to this problem, as many people in the country did not have a financial education to help navigate the country's financial system. Mexico's financial infrastructure also faced challenges, as can be seen in the country's number of bank branches per capita.Will DiMo succeed where CoDi did not?
Mexico's central bank tries to launch initiatives similar to Pix in Brazil, to help promote financial inclusion. In March 2023, it launched a new real-time (instant) payment scheme to do so: Dinero Móvil or DiMo. It is the successor to CoDi - or Cobro Digital - from 2019, as the number of accounts that made at least one payment with this was relatively low. CoDi emphasized QR codes - a payment type that was not very well known in Mexico - while DiMo focuses on payments with smartphones. Successfully matching this new system to consumer needs could benefit forecasts of real-time payments in Mexico.Fintech is preferred in online situations
Perhaps aided by the lack of financial inclusion, several companies sensed an opportunity to allow Mexicans to purchase goods regardless of having a credit or debit card. PayPal is used more often than domestic cards when shopping from abroad. In online buy now, pay later (BNPL), Mexico's two main players for BNPL are Kueski and Nelo. The former is an online consumer lender founded in 2012 and started to offer debt financing in late 2021 to help support BNPL products. Nelo was founded in 2019 and offers BNPL on Mexico's most popular e-commerce websites through a partnership with Mastercard.How to tap into Mexico's unbanked population will be the big question going forward. If successful, Mexico could become of the largest digital payment markets in Latin America. When that happens, however, is not yet clear.
