Mexico – local payment methods usage overview

The global economy is changing by moving towards a digital ecosystem through which companies can expand to several countries leveraging different technologies, generating new ways to promote, purchase, and pay for goods or services.

Mexico has to face various challenges in ecommerce, a multifactorial process where financial inclusion is one of the areas that has shown a before and after effect.

Undoubtedly, this is a process that requires great efforts where Mexico must add a degree of complexity if we take into account the information available from the most recent National Survey of Financial Inclusion. This is what the survey uncovers:

95% of the population continues to use cash to pay purchases of up to MXN 500 (around USD 26);

32% of the population between 18 and 70 years does not benefit from any financial product;

In areas such as the south and east, the financial gap becomes more acute. 60% of people in this region do not have an account with a bank or another financial institution;

78% of the population does not have mobile banking.

Currently, one of the most important obstacles to electronic commerce is successfully completing online payments. In Mexico, more technological payment facilitators are needed to support businesses in integrating secure payment processing.

For online purchases, the debit card is the most commonly used form of payment, while cash is winning relevance as an alternative way to traditional channels. The relevance of different payment methods away from traditional banking products to purchase online has impacted the way the Mexican consumer acquires products and services through digital channels; hence the relevance of cash through strategic contact points with the consumer, which has been easily adopted in the market.

The same report also uncovers the fact that 53% of respondents have experienced a payment rejection when buying online. The top three reasons for payment rejection are:

the bank detected the purchase as an unusual transaction;

the bank did not inform the customer why the purchase had been rejected;

the consumer had no funds when buying.

When considering the popular payment methods among consumers, the latest study of AMVO, ‘Payments and fraud in ecommerce’, shows that:

credit card is considered as the easiest payment method (78%) to use, followed by debit card (77%), and pay on delivery (75%);

following pay on delivery (77%), e-wallets (70%), and digital bank cards (69%) are considered the safest methods when buying online;

the main reason why it is considered difficult to pay online through debit or credit card is that too many security filters are requested to complete the purchase (45% and 57% respectively), followed by too many attempts to approve a purchase (43% and 31% respectively);

4 out of 10 online shoppers prefer the generation of a code or number from the bank’s app that must be entered on the page of the store where buying as a validation method of purchase;

6 out of 10 consumers declare that they do not have confidence in giving their banking information online;

5 out of 10 shoppers declare that they never or rarely save their bank information for future purchases;

48% of consumers prefer to pay electronically instead of paying in cash;

3 out of 10 online shoppers claim to have been a victim of electronic fraud; additionally, 58% of consumers consider that the risk of being a victim of electronic fraud has increased;

56% of shoppers claim to have left the purchase website because the site rejected their attempt to pay at least once in 2018.

This editorial was first published in our Payment Methods Report 2019 – Innovations in the Way We Pay, which provides a comprehensive overview of the up-to-the-minute trends, updates, and innovations in the payments space worldwide, depicting the key developments in the way people pay.

About Pierre-Claude Blaise

In his 15-year career, he has directed commercial and marketing projects in multinational companies and startups, mainly in consumer products, digital marketing, and ecommerce. He has held various positions, including: CMO of Dafiti Mexico, associate in digital consulting projects with Activamente, director of marketing of Nestlé’s beverage business for LATAM, and global marketing director of Nestlé Pure Life.

About Asociación Mexicana de Venta Online (AMVO)

AMVO is a non-profit civil organisation constituted in 2014 with the purpose of supporting and promoting the development of ecommerce and the digital economy in Mexico. It brings together more than 300 Mexican and international companies from the retail, fashion, travel, financial services sectors, among others, that seek to develop their ecommerce and apply the best practices of the industry.