What’s the Future of Cash Use in Mexico?


October 5, 2020

Don’t be fooled by conflicting reports. Important change is happening!
Follow Galileo
Follow Galileo LatAm

Don’t be fooled by conflicting reports. Important change is happening!

As the pandemic shuttered shops across Mexico and growing numbers of consumers turned to e-commerce, we saw reports of an estimated 40 percent annual increase in online sales, signaling that the coronavirus pandemic was indeed accelerating and strengthening electronic commerce in the country that already had the highest growth in this activity in the world.

Yet, in May the Bank of Mexico revealed that consumers used more cash than ever, as demand for banknotes and coins grew by more than 21 billion pesos.

How could these two seemingly contradictory trends both be true?

Acceleration and digital adoption are real

Yes, consumers find cash reassuring and a reliable form of payments in a crisis, but don’t be fooled. These reports and anecdotal evidence indicate that real traction is occurring.

Market adoption for digital payments is accelerating and pushing people to overcome their deeply integrated relationship with cash at even a cultural level. This huge change is slow-moving but has picked up drastically with the new demand due to COVID-19.

Further supporting this view, Mastercard reported that since the pandemic began, two-thirds of Latin American consumers say they are using less cash or none at all, and globally nearly seven in 10 consumers worldwide believe their shift to digital payments will likely be permanent.

Similarly, in places like Argentina, 73 percent of survey respondents asked to evaluate their new digital and online experiences said they were satisfied or very satisfied.

The prevalence of cash in everyday society is undeniable, but the change we're witnessing in recent weeks is every bit as concrete. Incremental, but definitely real.

Enjoy our Insights?

Recent Posts

September 29, 2023

Start Your Bank’s Tech Modernization Journey With This API

Discover how Galileo's API-driven approach can help banks modernize incrementally, enhance user experiences, and stay competitive in the digital era.

See More
August 28, 2023

BIN Sponsorship: What Fintechs Should Know When Choosing or Changing Sponsor Banks

Choosing a sponsor bank, or knowing if you need to change banks, is one of the many nuances fintechs must understand when navigating a payments program.

See More
August 16, 2023

How SMBs are Leveraging Technology for Better Liquidity Management

Amid economic challenges, SMBs seek tech for liquidity management, offering a significant market opportunity for solution providers.

See More
May 19, 2023

3 Ways Conversational AI Optimizes Banking Customer Journeys

Next-gen chatbots & intelligent assistants enable banks to transform automated customer service from frustrating to engaging, driving user satisfaction & happiness.

See More
March 15, 2023

How Any Brand Can Capture the BaaS Opportunity in 2023

Banking as a Service allows brands to create new revenue streams, improve CX, embed financial services, and enhance the customer value proposition.

See More