Mexico's payment landscape is as diverse as its vibrant culture, mirroring the country's blend of traditional and modern lifestyles. With a significant portion of the population working in the informal economy and a lower banking penetration compared to other countries, the payment methods vary considerably. This article explores the various payment methods in Mexico, shedding light on how they are evolving with the digital era and adapting to the consumers' needs.
The data for 2023 indicates that debit and credit cards are the top two answers among Mexican consumers when it comes to the most common online payments by type1. PayPal takes the top spot for the most used online payment brand2. The Mexico Payments Market is projected to reach USD 103.37 billion in 2023, growing at a CAGR of 10.18% to reach USD 167.85 billion by 2028, with major companies like Visa, Mastercard, American Express, BanCoppel, HSBC, Citibank, Banorte, Scotiabank, Banco Inbursa, and Banco Azteca being the key players3.
The alternative payment methods are also heating up in Mexico, with developments in QR code solutions, interoperable payment rails, cash alternatives, and BNPL providers noted over the past year4. E-commerce in Mexico is expected to grow at a CAGR of 33% between 2023 and 2026, signifying a positive trajectory for digital payment methods5.
Payment by card
The payment landscape in Mexico is gradually evolving with cards playing a crucial role despite the cash-dominated market. In 2023, the Mexico cards and payments market size reached $157 billion, reflecting a burgeoning trend expected to continue with a CAGR of more than 13% from 2023 to 20271.The card market in Mexico is skewed towards debit cards. By the end of 2021, the number of debit cards in circulation was roughly five times the number of credit cards, although credit card circulation grew within the same year2.Online shopping using credit and debit cards is on a positive trajectory. In the first quarter of 2023, purchase requests via credit cards amounted to 142.163 million pesos, with 92.329 million pesos being authorized, signifying an authorization rate of 65%3. This growth is also reflected in the year-on-year transaction volume up to July 2023, showing an average increase of 5.3% across key categories4.Furthermore, in 2022, about a third of online purchases made in Mexico were paid for with credit or charge cards, indicating a substantial portion of the e-commerce market relies on card payments5.This data underscores the gradual yet significant adoption of card payments both online and offline in Mexico. While cash remains predominant, the trend towards card usage, especially online, is evident, which aligns with the global shift towards digital payments.
Cash payment
Cash remains a significant player in the Mexican e-commerce landscape. E-commerce vendors continue to cater to cash preferences, extending into 20241. Cash on Delivery (COD) is a common practice, allowing a seamless transaction for online purchases. Customers can opt for this method, print a voucher, and pay at local stores like Oxxo upon order receipt. This practice bridges the digital and cash economies, providing a pathway for the unbanked population to participate in online commerce.
Payment by bank transfer
Instant payments are making waves in Mexico's e-commerce. The market share of real-time payments in overall transactions is on an upward trajectory, though exact figures for 2023 remain undisclosed1.The scene is set for growth. From 2022 to 2027, the real-time payment market in Mexico is predicted to grow at a rate of 8.6%, showcasing a rising acceptance of this swift payment method2.Volume speaks volumes. In Q3 2022 alone, a massive 24 trillion Mexican Pesos were transferred via online banking, underscoring the hefty transaction volumes facilitated by digital bank transfers3.The trend is upwards. The Bank of Mexico noted a 62% hike in transactions via its Interbank Electronic Payment System (SPEI) in 2021, led by transfers of up to MXN$8,000 (about US$420), highlighting the growing adoption of instant payment systems4.These insights underscore the growing inclination towards instant payments in Mexico's e-commerce sector, driven by their ease and immediacy.
Payment by installment and BNPL
The rise of the BNPL (Buy Now, Pay Later) model in Mexico in 2023 is undeniable. The statistics reveal a notable upward trajectory. Firstly, the BNPL payment market is burgeoning with a total value projected at $5,019.0 million, marking a 55% increase compared to the previous year1. This momentum is underscored by a remarkable annual growth, where the total BNPL payments are expected to reach $5.2 billion, a surge of 52.0%2.Secondly, the long-term projection is equally promising. The market is on an upward slope, with a Compound Annual Growth Rate (CAGR) estimated at 31.8% from 2023 to 20283. The Gross Merchandise Value (GMV) for BNPL payments highlights this upward trend, escalating from $3.4 billion in 2022 to an impressive $20.6 billion by 20283.These figures not only shed light on the sustained growth of BNPL payments in Mexico but also reflect a global trend towards more flexible payment arrangements, especially in the online retail domain.
Payment by digital wallet and X-Pay
In 2023, the market for digital wallets and X-Pay in Mexico is burgeoning, propelled by digitalization. The market value hits $22.7 billion, showcasing solid adoption of these payment solutions1.The market boasts a Compound Annual Growth Rate (CAGR) of 14.33%, escalating from $2.010 billion in 2021 to $5.134 billion by 20282. X-PayD by Xius enters the scene, joining other notable local players like Mercado Pago, illustrating the sector's dynamism3.The overall payment market, encompassing digital wallets, is set to grow from $103.37 billion in 2023 to $167.85 billion by 2028, at a CAGR of 10.18%4. This growth shines a light on the significance of digital wallets in the Mexican payment ecosystem.
