Mexico Still Lagging in Financial Inclusion

Despite being the second-largest economy in Latin America, Mexico lags in digital payments, with only 23% of transactions conducted digitally. In contrast, Brazil, Argentina, and Chile boast nearly 50%. Experts urge finance and fintech stakeholders to collaborate to boost financial inclusion beyond issuing more credit cards, enabling more Mexicans to access goods and services, and improving conditions for SMEs.

During Open Finance 2050, Myriam Cosío, President, ASAMEP, acknowledged the progress made in Mexico regarding financial inclusion as the country had only 600,000 terminals for electronic payments 10 years ago, while now this number has risen to 5 million. Furthermore, payments with cash dropped from 90% to 75%. “Another interesting fact is that the number of transactions per card in Mexico has increased from 21 transactions per card per year to 61,” she added. 

Despite these advancements, Cosío stressed there is still a long way to go as Mexico is not performing at the same level as its pairs in South America. "When we compare ourselves with Brazil, Argentina, Chile, Colombia, and Peru, they have already achieved 40-50% penetration of electronic payments in the same or less time,” she noted. 

Felipe Vallejo, President, FinTech Mexico, says technology is an ally in achieving financial inclusion and a more modern Mexico. He states that it can provide dignified finance for everyone, as it has made other products like cars, energy, and even coffee more accessible. He noted that proof of this democratization is the number of FinTech Mexico's users, which has risen to 50 million provided by its membership. 

Vallejo highlighted that one in four fintech users in Mexico had never had access to financial services before. Approximately 25% of FinTech users are experiencing financial services for the first time, and about half of these users are young people having their first approach to financial products. The other half are individuals who have historically been marginalized from financial services. “Technology has truly been the most successful social program in the history of humanity as it is democratizing access for millions of people around the world,” he added. 

Mario Fernández, CEO and Co-Founder, Finvero, acknowledged the challenges and opportunities in expanding financial inclusion. He views Open Finance 2050 as the best opportunity for this, highlighting his company's goal to foster collaboration throughout the event as different actors in the financial realm can exchange knowledge and map joint strategies. “We believe collaboration will create a market for everyone, where everyone can have accessible financial services. This collaboration must include e-commerce, SIOFIPOs, SOFOMEs, fintechs, microfinance institutions, and of course, banks, which are important players in the system,” Fernández added. 

Alejandro Valenzuela, Chair of the Board, Banco Azteca, emphasizes that financial inclusion must be accompanied by education, particularly for older customers. He highlighted the campaign at each of Banco Azteca branches to teach users how to save time by using the company’s app. 

Valenzuela stressed the importance of collaboration between the private and public sectors in educating users. Valenzuela said that it is more beneficial for users to save their money in regulated institutions rather than keeping it in unregulated ones or at home, and also emphasized the need to teach them how to better utilize financial tools. “The next step is the combination of education, which is very important so that young people understand money management. Many times, people's problems arise because they over-leverage themselves or take credit from loan sharks, which leads to the users’ downfall,” Valenzuela told MBN. 

Claudia Revilla, Director General, ProDesarrollo, emphasized that while discussing financial inclusion is a positive step for the sector and the economy of users, it is equally important to delve into the issues surrounding financial tools. She highlighted problems such as discrimination, gender violence, poverty, and climate change, noting that these issues impact not only users but also the returns of microcredits. “Today in Chiapas, 98% of the loans granted are affected by organized crime, 99% of the loans granted are affected by climate change, 62% are affected by gender-based violence, and 96% by extreme poverty,” she said, adding that financial inclusion should go beyond just issuing more credit cards but accompanying credit users in addressing their problems.