Mexico Rejects Visa’s Acquisition of Prosa Over User Risk

Mexico’s National Anti-Monopoly Commission (CNA) has formally blocked Visa International’s acquisition of a 51% stake in Prosa, one of the country's primary payment processors. The decision, finalized on Friday, Feb. 20, ends a transaction process that began in December 2023 and seeks to prevent structural risks to competition within the domestic financial system.

The CNA, which recently replaced the Federal Economic Competition Commission (COFECE), determined that the integration of the world’s largest credit and debit card brand with a dominant local processor would have "harmful effects" on financial service users. Prosa is currently owned by a consortium of major banks, including Banorte, Santander, Scotiabank, HSBC, and Invex.

"The full commission concluded that it would have harmful effects on the Mexican financial system and, particularly, on users of financial services in the country," the regulator stated in its official resolution.

Competitive Risks and Market Dominance

The CNA identified several primary risks underlying its rejection of the deal. Chief among them was the potential elimination of a direct competitor. Although Visa is primarily a card network, it also offers payment processing services. The commission argued that Visa has “high disruptive potential” as an independent processor and that the acquisition would allow the company to consolidate market power through acquisition rather than competition on the merits.

Data cited in the resolution indicate that Visa already holds a commanding position in Mexico’s card licensing market. As of 2022, Visa accounted for 57% of active credit cards and 59% of debit cards nationwide. Integrating Prosa—which handles approximately 44% of the processing market as a clearing house—would create a group with a "relevant position" in both licensing and transaction processing.

The CNA also expressed concern over the future of the Carnet brand, owned by Prosa and positioned as a lower-cost alternative in the domestic market. The regulator warned that the “operation put at risk the viability of Carnet as a low-cost option for users,” potentially reinforcing a duopoly between the remaining international brands.

Data Asymmetry and Disruptive Growth

A central element of the resolution relates to access to transaction data. As a processor, Prosa manages strategic information on all transactions it clears, including those involving competing brands such as Mastercard. The CNA argued that the acquisition would grant Visa access to this “critical competitive input,” creating what it described as an “unreplicable competitive asymmetry” and raising barriers to entry or expansion for rival market participants.

The commission also cited Mastercard’s trajectory as evidence of organic market entry. Since entering the clearing house segment in 2021, Mastercard has increased its processing share from zero to 7.8% within three years. In contrast, the CNA noted that Visa opted to pursue acquisition of an established competitor rather than expand through organic growth.

Although Visa and Prosa proposed behavioral and structural remedies to address these concerns, the CNA concluded that the measures were neither “suitable nor sufficient” to mitigate the identified competitive risks.

Visa’s Response and Industry Reaction

Following the ruling, Visa expressed its disagreement with the decision. The company argued that the transaction would have strengthened Mexico’s payments infrastructure and increased competitive dynamics.

“Visa is disappointed with the decision of the CNA. We firmly believe that the combination of Visa and Prosa would significantly boost competition in the market and modernize payments in Mexico, allowing consumers, businesses and financial institutions to benefit from more innovative and secure digital payment experiences,” the company said in a statement.

Visa added that it remains committed to the Mexican market and is “carefully reviewing the CNA resolution and will evaluate all available options.”

Historical Context and Structural Constraints

The proposed transaction traces back to a 2020 COFECE study that identified limited effective competition in Mexico’s card payment system. At the time, the regulator suggested that banks divest their stakes in Prosa and E-Global — the other leading processor, owned by BBVA and Banamex — to foster a more open and competitive ecosystem.

 “Eight banks are co-owners of the clearing houses responsible for processing operations in the payment network, which allows them to access information that other banks do not have and to implement commercial schemes that give them advantages over competitors,” COFECE stated in its 2020 preliminary report.

Mexico’s payment processing market remains highly concentrated. Four clearing houses operate in the country: Visa, Mastercard, Prosa and E-Global. Prosa alone processes at least 10.55 billion transactions annually and, according to corporate disclosures, participates in approximately 63% of the national market through its various services.

Industry analysts have also pointed to Prosa’s ownership structure as a complicating factor. Daniel Becker, director, Grupo Financiero Mifel, noted that Prosa’s shareholding configuration — involving multiple competing banks — created structural obstacles to the transaction.

“The first obstacle was structural: Prosa was not a traditional company with a single controlling shareholder willing to sell. It was and remains an entity with equity participation from multiple banks, many of them direct competitors. Selling to Visa implied altering the balance of power within the payments ecosystem,” Becker wrote.

He further observed that transferring processing functions to a global operator raised questions regarding technological sovereignty and control over critical financial infrastructure.