Summary

The Mexico payments market is expected to register a CAGR of 15.75% during the period of 2022-2027. The primary factor driving the growth of the market in the region is the rising adoption of digital payments supported by government initiatives and strong development in E-commerce, among others.

Key Highlights
As Internet access becomes more widespread in Mexico and the telecom industry supports mobile Internet adoption and digital access, the number of online users will likely rise. As more consumers access the Internet, this creates an increased opportunity for cross-border sales, particularly for digitally savvy foreign businesses.
In Mexico's e-commerce business, having a diverse selection of payment options is critical. These online buyers are spending an increasing amount of time on their cellphones, and social media provides an opportunity to attract their attention. Mexico's e-commerce business is expected to rise in double digits through 2021, thanks to solid levels of cross-border purchasing.
The COVID-19 outbreak, lockdowns, and the resulting economic contractions everywhere in the world wreaked havoc on the country's economy. Mexico's real GDP growth rate for 2020 was -8.5 percent, according to the International Monetary Fund (IMF).
Mexico's digital economy has grown and flourished due to the COVID-19 outbreak, as have consumers' attitudes regarding digital ways of payment. When the movement restriction orders were enforced, customer spending patterns moved to digital means. Physical payments with high levels of contact, such as cash and fingerprints, are avoided, resulting in changes for both parties. Micro, small, and medium-sized businesses (MSMBs) have started to see the benefits of accepting digital payments.


Key Market Trends

Robust Growth of Digital Payments


Consumers in Mexico prefer cards for online purchases, with credit and debit cards leading the way. Due to the increased popularity of digital wallets, card shares will fall marginally until 2025.
The Bank of Mexico recently released CoDi, which significantly modernizes and improves the long-standing SPEI service that it developed with commercial banks in 2004. CoDi accepts P2P, P2B, B2B, and B2P payments via internet or mobile banking and recurring payments such as rent, loan repayments, and mortgage payments. As a result, the volume of real-time payments increased by 60% year over year.
The Bank of Mexico developed the CoDi mobile payments ecosystem by extending the SPEI central payment rails, essentially eliminating the need for banks to establish their mobile money transfer capabilities.


Increase in Internet Penetration


The increasing use of smartphones in numerous activities and the growing number of mobile users are driving the industry forward. People are opting for more digital ways of completing activities that were formerly done manually as the world becomes increasingly digitalized.
The increased use of digital payment systems has been attributed to the increasing penetration of the internet and digital literacy. Smartphones are one of the most prevalent and important intelligent gadgets that can perform various duties.
Moreover, people prefer online purchases of vital commodities due to the closure of local marketplaces and the desire to avoid public gatherings, which is raising demand for the digital payments industry.


Competitive Landscape

The Mexico payments market is moderately consolidated as few players currently dominate the payments market. Major players in the Mexico payments market offer well-developed digital payments solutions, adopting strategies like acquisitions and partnerships to expand their reach to more consumers in the region. Some of the major companies in the payments market are Visa Inc., Mastercard Inc., HSBC, and American Express.


August 2020 - The BanCoppel Express app, which accepts CoDi payments, was released by BanCoppel. The growing popularity of CoDi has prompted more prominent merchants to respond. Coppel, a Mexican department store, began accepting CoDi payments in its 1,562 locations in November 2020.
May 2020 - Facebook is adding "Shops" to its social network and Instagram in its most significant move into e-commerce. The social networking firm announced that it is adding shopfronts for businesses to list their wares and a host of other e-commerce functionality across its apps. The new features move Facebook further than ever from its roots as a purely advertising-focused business and take it more squarely into competition with far more established online shopping platforms like Amazon, eBay, and Etsy.


Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

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