Mexico—Latin America’s second-largest economy—saw rapid growth in its e-commerce market in 2020, and whether its citizens are shopping in person or online, cash remains king.
With a population of nearly 130 million, Mexico’s economy is second only to Brazil in Latin America, and its capital city is a significant global financial centre. It is also seeing strong growth in e-commerce. By 2023, it’s estimated that Mexico will be the eighth largest e-commerce market in the world. It is also a powerfully cash-driven economy.
Given only 37 percent of adults have bank accounts, and those with access to cards find them unreliable—with more than half saying they’ve had cashless payments rejected for online transactions—it’s not surprising that even online purchases are paid for using physical money.
Ask any local in Mexico: whether it’s a retail store, an online marketplace, or a nightclub, when it comes to purchases, paying by cash is a necessity.
95 percent of people use cash for payments up to 500 pesos (around $24 or €20) and—according to the 2020 Global Payments Report—71 percent of all point-of-sale payments are conducted in cash, with debit cards accounting for 14 percent of sales and credit cards close behind on 13 percent.
For online sales, cash is also a payment option thanks to companies offering voucher-based services that customers can select during online checkout. When doing so, they receive a voucher that they can display in participating convenience stores—particularly useful since these are commonly open all hours, unlike other shops—and then settle the bill in cash. The service provider transfers money to the vendor, and goods are dispatched to the customer. Major e-commerce vendors including Amazon, MercadoLibre and Walmart all participate in this service.
Cash in Mexico is a way of living, and to stay competitive, international merchants must add cash payment into their strategies to reach Mexican shoppers.
Paying cash for online purchases is, of course, not unique to Mexico, or even Latin America. In Nigeria—one of Africa’s best-developed e-commerce markets—online purchases are most often made in cash. One service offering cash payment for online purchases in Europe is Barzahlen/viacash, and in Asia, cash-loving Japan offers many options for customers to buy products online, or purchase event tickets, using cash in convenience stores.