Payment Methods In Mexico

Ecommerce has lagged in Mexico, in large part because of broad economic factors that prevent many consumers from participating in the digital economy. The country’s higher-income consumers access digital media and use the internet for shopping and buying, but many others remain on the sidelines.

In recent years, however, the number of payment methods available for online and offline consumers in Mexico has grown substantially, creating new paths for the offline and unbanked segments of the population to move out of the informal cash-based economy and into the formal digital purchase funnel.

This report provides an overview of Mexico’s payments landscape both online and off. It offers insights from retailers, banks and others in the payments chain,

and explores consumer attitudes toward cash and its digital alternatives.

While it is too early to say which forms of banking and payments will prove most popular in Mexico, the new options are expected to drive consumer adoption of banking and digital commerce going forward.

Consumers in Mexico have a huge variety of electronic options when it comes to making purchase payments, with choices ranging from SMS-based transactions to mobile point-of-sale (POS) devices connected to a smartphone, not to mention the typical channels of credit and debit cards.

And yet the vast majority of transactions in Mexico are cash-based, a fact that has significantly inhibited the uptake and growth of ecommerce in the country.

There are a number of factors that have kept cash as Mexico’s preferred payment method. The first and most important is the general state of the country’s economy. Growth has been relatively slow during the past decade, poverty levels are high and wealth is highly concentrated, mainly in urban areas.

A secondary challenge is the geographical concentration of financial services in a few relatively wealthy urban centers, which has left much of the country without access to modern financial tools.

Mexico is the second-largest nation in Latin America

by gross domestic product, population and area, but

its economy has fallen short of the dynamic growth projected for it at the beginning of the new millennium. According to the World Bank, Mexico’s GDP has expanded at an average annual rate of just 2.4% since 2000, hardly eye-catching when compared with the likes of neighbors Colombia (4.27%), Peru (5.58%) and Brazil (3.62%). In fact, Latin America’s largest economy, Brazil, has a GDP roughly double the size of Mexico’s.

At least two out of every five people in Mexico have

lived below the poverty line for the best part of the

past decade, and the level for the most recent year measured—2011—reached 51.3%, according to World Bank

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