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FinTechs belonging to this category offer alternative payment services which are supposed to provide a faster and cheaper way for national, European, and international payments for private and business customers by using new technologies.
For example, payment service providers hereby offer solutions to easily integrate several payment services in online shops.
Some FinTechs furthermore provide real cash register systems and online-reservation solutions for restaurants and shops providing their own payment services or making use of the payment services of FinTechs described above.
Introduction
Attitude of the country towards modern payment services
The social and political climate in Mexico is positive regarding modernisation of payment services. As a result of recent reforms, the legal and regulatory landscape is introducing modern procedures to increment the offering of financial services in Mexico. The political agenda includes a general inclusion policy, whose main objective is to formalise the economy and include the under-banked.
Most domestic payments are processed through a government owned and managed (through the Central Bank) payment system, which has been very recently revamped to reinforce digital messaging and increased participation from financial entities in the country.
Legal affairs
Obligations and requirements to provide payment services or ancillary services described above
Payment services in general are not a regulated activity, however certain roles in the payment process (i.e. managing an e-wallet or providing connectivity to payment systems) require the relevant player to hold specific authorisations. For those products that do require an authorisation, Mexican law provides a minimum capitalisation and other governance requirements. The level of capitalisation will depend on the exact type of business model presented to the governing body, the National Banking and Securities Commission (“CNBV”).
Additional comments regarding the legal situation for payment services or what FinTech’s must be aware of in this business area
Mexican regulation in this sector has thus far proved to be highly dynamic and evolving within the needs of the consumers. This regulation will always seek to protect consumers as a group and promote inclusion into the system. In addition to the previously stated, Mexican financial regulation is constantly updated to conform with International Standards specifically regarding compliance, KYC, and Anti-Money Laundering requirements.
Economic conditions
Market size for payment services and biggest payment service providers
It is difficult to provide a size for the market since payment services are not only offered by regulated financial entities. Payments offered through the Central Bank’s owned and managed payment system (“SPEI”), have exponentially increased in the recent years. End-to-end transfers through SPEI have increased from 68 million in 2010 to more than 1.6 billion in 2021.
Additional comments regarding the economic situation for payment services or what FinTech’s must be aware of in this business area
As described above, SPEI rules have recently been modified to extend services and connectivity to third party providers that are not directly interconnected to the system.