Mexican Banks Issued Millions of Unwanted Cards

Thirteen years since Uber made its debut in the Mexican market, it encountered an unexpected hurdle. While many locals possessed smartphones capable of downloading the app, a large segment preferred not to use bank cards for payments due to either lack of access or personal choice.

In response, the ride-hailing service implemented a cash payment option within a few years, which remains the preferred method for more than half of its users in Mexico.

This trend reflects a broader challenge: despite a rise in financial services available in the country, cash remains the favored payment method. In many ways, the convenience of digital transactions is overshadowed by entrenched cultural attitudes toward finances and a high incidence of tax evasion, particularly in rural areas.

Read: Legal challenges and market conditions hinder Uber’s global pathway

On paper, Mexico boasts one of the fastest-evolving fintech ecosystems in Latin America, with over 800 companies operating—a sharp increase from under 200 a decade prior.

Electronic payment methods have seen significant growth, driven by millions in venture capital, with approximately 80% of Mexicans holding at least one financial product, according to government data.

However, more than half of all debit cards in Mexico remain unused, with nearly 50% of credit cards unutilized. This scenario arises largely because banks and fintech companies often inundate their clients with unsolicited card offers—a concern significant enough that last year, Mexico’s lower house passed a bill prohibiting fees on unsolicited items.

Cash still prevails in daily transactions, comprising about 85% of small purchases according to government statistics.

Consider Roberto Negrete, a 33-year-old construction consultant from the State of Mexico. He manages nearly all his finances in cash, a practice inherited from his father.

Upon receiving his paycheck, Negrete visits Banamex, where he has a checking account. Rather than depositing his check, he opts to exchange it for cash, which he stores in a safe at home. His bank account is utilized sparingly, primarily for services requiring digital payments, like Netflix and Apple Music.

“I still prefer cash because it’s simpler and saves me from having to declare my income, which can be tedious and confusing,” he asserts. “I dislike depending on a financial institution to manage my money. I prefer to handle it myself.”

Read:
Progressing towards a cashless society
Uber now offers drivers various payment methods
Why Uber faces challenges in maintaining its tech identity

Similar to many Mexicans, Negrete utilizes the financial system when necessary, but remains cautious about relying on it. This attitude is a product of Mexico’s extensive informal economy and a lasting mistrust of institutions following a banking crisis from decades past.

Around 54% of the workforce operates outside the formal economy, impacting the nature of earnings, spending, and saving practices. Cash grants privacy, while digital payments create trails that may expose users to higher taxes.

Nevertheless, non-cash transactions are beginning to gain momentum. By 2024, 19% of Mexicans aimed to make payments exceeding 500 pesos (approximately $29) via cards, up from about 12% six years earlier, according to findings from the central bank. Meanwhile, mobile or electronic payment methods became the most favored for 7.6% of consumers, a significant increase from merely 0.3% in 2018.

“The major reason people shy away from digital payments is fear of taxes,” stated Emilio Romano, the head of the Asociación de Bancos de México, during an interview. Hence, many consumers opt for cash, which numerous vendors also prefer.

“Cash perpetuates cycles that contribute to tax evasion and various illegal activities,” Romano stated.

Read: PayInc intensifies efforts to transition South Africa to digital payments

The aversion to banking becomes more pronounced with increased distance from urban areas. In Mexico City, a fintech hub, about half of all transactions are conducted electronically, yet cash accounts for roughly 90% of payments in some impoverished southern regions.

Mexico’s banking sector lags behind that of its Latin American counterparts. While it stands as the region’s second-largest economy, only 63% of adults have banking accounts, according to government data.

In contrast, over 90% of adults in Brazil utilize Pix, a real-time payment system initiated in 2020 by the central bank, which swiftly gained preference among users.

Although Mexico has developed its own real-time payment systems, older, slower infrastructures continue to operate simultaneously, complicating financial transactions for both businesses and institutions. Many fintech executives privately share concerns about the sluggish pace of regulatory changes that could enhance user adoption.

Read: How Pix-enabled gangs exploit Brazil’s mobile payment boom

Nevertheless, companies like Nu Holdings Ltd, Banco Plata, Mercado Pago, and Klar are making strides after substantial investments, opening millions of accounts across Mexico. Others have faced difficulties under competitive pressure: last year, Grupo Financiero Banorte divested its unprofitable digital bank to Klar.

This year, Femsa, a leading retailer in Mexico, laid off hundreds from its fintech division amid challenging market conditions.

Tamara Caballero, CEO of Banco Multiva SA, noted that the intense competition in the finance sector has prompted many larger, traditional banks in Mexico to incorporate innovative technologies, including AI, to retain existing customers and attract new ones who are reluctant to open bank accounts.

“Digitization will be a pivotal driver of financial inclusion,” she asserted. “It’s better to be involved in the banking system and have access to financial products than to remain marginalized.”

Historical Anxieties

Distrust towards Mexico’s banking institutions is rooted in traumatic experiences from the financial crises of the 1980s and 1990s, where banks transitioned from state control to inexperienced private ownership, resulting in institutional failures and extensive bailouts funded by taxpayers.

Some level of skepticism toward banks persists today.

Government surveys reveal that only about 60% of Mexicans trust financial institutions to safeguard their money and data, while just over half trust that their complaints will be adequately managed.

Additionally, some individuals remain cautious about digital transactions. Retailers like Grupo Elektra and Grupo Coppel possess in-store banking services, giving them an advantage over fintechs among the underbanked, thanks to their wide-ranging physical locations across the country.

“People trust the person, not the machine,” stated Rubén Coppel, financial services vice president at Grupo Coppel and chairman of BanCoppel, the company’s banking division.

Financial hurdles and complexities further inhibit cash’s integration into the banking system. For instance, depositing cash at convenience stores usually incurs a fee of around 20 pesos ($1.15). Furthermore, small businesses often face additional costs and logistical challenges with accepting digital payments.

Nonetheless, those outside the banking framework risk missing opportunities for potential savings. While many traditional bank accounts in Mexico yield minimal interest, some fintech companies target customers with rates ranging from approximately 8% to 15%. Additionally, cash that remains unbanked and uninvested depreciates in value as inflation rises.

“Once funds are deposited in accounts, resistance wanes significantly,” remarked Carlos López-Moctezuma, CEO of BanCoppel. “The significant challenge lies in converting cash, which serves as the starting point for millions of Mexicans, into digital forms without incurring additional costs.”

Mobile-friendly solutions face challenges in reaching the unbanked population. While 63% of fintech companies claim to serve underbanked individuals, only about a quarter report effectively reaching users who were completely outside the financial network prior, according to a survey conducted by the Mexican Fintech Association.

The ramifications extend beyond individual consumers, as highlighted by Romano, the head of Mexico’s banking association.

Read:
Investec targets low-value payment sector
The shift towards decentralized finance

“Formalizing the economy fosters economic expansion,” he explained. “Entrepreneurs operating informally cannot expand, as they must collect cash in person, cannot establish branches, and lack the means to create a credit history.”

Industry leaders and policymakers are proactively working to reshape this landscape. Fintech companies aim to decrease user fees and simplify their products, while Romano indicated that banks and the government are striving to enhance lending from about 38% to 45% of GDP by 2030.

In April, President Claudia Sheinbaum announced an initiative to reduce transaction costs for card payments at gas stations, part of the government’s broader project to decrease reliance on cash.

Negrete, the construction consultant, recognizes the evolving landscape.

“One day I will need to go digital,” he reflected. “Not because I want to, but because I will have to.”

© 2026 Bloomberg