Mexico Rising as Cross-Border Payments Hub: JPMorgan

Mexico is emerging as a strategic hub for cross-border payments as nearshoring and global supply chain shifts increase demand for digital financial infrastructure, according to Umar Farooq of JPMorgan Chase. The expansion of real-time payment platforms such as SPEI, operated by Banco de México, alongside a fintech ecosystem of more than 1,100 companies, is strengthening Mexico’s role in global trade finance and financial services. However, persistent financial inclusion gaps — including high cash usage and limited banking access — remain a key challenge for banks, fintech firms and payment providers seeking to scale digital payments across the economy.

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Mexico is emerging as a strategic hub for cross-border payments as companies reorganize global supply chains and increasingly rely on the country’s digital financial infrastructure, according to Umar Farooq, global co-head of payments, JPMorgan Chase.

After a recent visit to the country, Farooq told El Economista that Mexico’s geographic position, modern payment systems and deep integration with global trade flows are reinforcing its role in international financial transactions.

“Mexico is transitioning into a regional hub for cross-border payments as companies rethink their supply chains,” Farooq said. He highlighted the country’s 3,200km border with the United States and its proximity to the world’s largest consumer market as key structural advantages. Mexico’s digital infrastructure, including the interbank electronic payments system SPEI, is also enabling faster and more reliable financial transactions, he added.

The shift comes as nearshoring accelerates in Mexico, driving demand for financial tools capable of supporting increasingly complex international trade flows. According to Farooq, services such as multi-currency settlement, automated foreign exchange management, virtual accounts and advanced reconciliation systems are becoming essential as supply chains concentrate in the country.

Mexico’s growing role in global payments reflects broader changes across the financial services industry. Payment providers are now operating within a more complex ecosystem that includes traditional banks, fintech firms, large technology companies, cloud infrastructure providers and payment processors, as well as emerging players developing artificial intelligence and embedded finance solutions.

To remain competitive, JPMorgan has expanded its investment in technology, employing more than 9,000 engineers to develop financial solutions that range from AI-based fraud detection to blockchain infrastructure, tokenization and biometric payment systems.

Farooq said these technologies could significantly improve the efficiency of cross-border commerce by reducing intermediaries and accelerating settlement times. Digital currencies and blockchain-based infrastructure, he added, have the potential to lower costs and improve transparency in international transactions, particularly for businesses engaged in global trade.

“Our approach is pragmatic and client-driven,” Farooq said. “We apply tokenization when it solves real problems such as cross-border settlement, trade finance and liquidity optimization, while relying on traditional infrastructure where it remains more efficient.”

The scale of the bank’s payment operations illustrates the importance of digital financial infrastructure in the global economy. Farooq said JPMorgan processes about US$12 trillion in payments on a typical day, rising to US$15 trillion during peak periods, across more than 160 countries and 120 currencies. The system operates with a reported 99.9% accuracy rate, which Farooq compared with reliability standards used in critical industries such as aerospace or nuclear energy.

Mexico’s emergence as a payments hub is also supported by the rapid expansion of its domestic digital financial infrastructure and fintech ecosystem.

At the center of this infrastructure is SPEI, the real-time payment platform operated by Banco de México, which has become one of the most widely used systems of its kind in Latin America. According to the central bank, the platform processed 5.3 billion transactions worth MX$219 trillion (US$12.4 trillion) in 2024, equivalent to roughly 6.5 times Mexico’s GDP. The network currently includes more than 80 direct participants, including banks, fintech companies and financial cooperatives.

Digital payment adoption has accelerated in recent years as consumers and businesses increasingly embrace electronic transfers. Data from Banco de México’s 2024 National Survey on Financial Inclusion shows that 23.7% of the population now uses electronic transfers for payments, up from 8.2% in 2021.

Mexico’s fintech ecosystem has expanded in parallel with this infrastructure. The country now hosts more than 1,100 fintech companies, and in 2Q25 it surpassed Brazil in venture capital funding for the sector.

Despite this progress, cash continues to dominate everyday transactions, underscoring the potential for further digitalization of the economy. Around 85% of payments below MX$500 (US$28) are still made in cash, while 51% of Mexicans remain unbanked.

For Héctor Cárdenas, CEO and co-founder, Conekta, the long-term winners in Mexico’s digital finance sector will be companies capable of serving the entire population rather than focusing solely on digitally savvy consumers.

“The winners will not be those who captured the easiest customers first,” Cárdenas said. “They will be those who figured out how to serve everyone. Ignoring any demographic group means leaving billions on the table.”