Cash Outlook: Mexico

Type Journal Article - IBGC Working Paper
Title Cash Outlook: Mexico
Volume 13
Issue 2
Publication (Day/Month/Year) 2013
URL of Cash/IBGC WP13-02 Cash Outlook​Mexico.pdf
Cash has been very “sticky” in Mexico. Despite the availability of non-cash alternatives such as credit, debit, and prepaid cards, online banking, and—most recently—mobile banking, an estimated 90% of transactions in Mexico are still performed in cash. Precise estimates of the number of cash transactions are not available due to the inherent difficulties in tracking cash and a lack of adequate survey data. However, the available surveys on financial inclusion, data on electronic transactions, and industry-specific payments data all make it clear that cash is king in Mexico. This cash outlook report provides an overview of the places in Mexico where cash is most and least used, who is using it, and why. To do this, the report examines the reach of the banking and payments system, bank account and card ownership, the evolution of cash and cash-alternatives usage, new banking and payment business models, and relevant government regulation. Studying the role of cash in Mexico is a timely endeavor, given Mexico’s current position as co-chair of the G-20 partnership for financial inclusion. The purpose of the report is to pave the way for further research in Mexico on the costs of cash for consumers, merchants, financial institutions, and the government. Consumers invest considerable time and money in managing their money, but the costs of cash for individuals are rarely measured. Likewise, the costs associated with cash operations for merchants and financial institutions have not been studied in depth. In Mexico, like in many emerging markets, much research has been conducted regarding the time and cost associated with consumers’ use of formal financial services, but less attention has been paid to the nature of the cash economy that competes with non-cash alternatives.

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