This section covers a range of financing topics for selling to Mexico. It covers payment methods, things to know about banking systems in Mexico, foreign exchange controls, U.S. and correspondent banking, and project financing.
Methods of Payment
Mexican lending rates are significantly higher than in the United States. Requiring payment either by confirmed letter of credit or cash in advance can cost U.S. exporters sales opportunities. While favorable payment terms are important, U.S. companies should consider all financing options available to be as competitive as possible. In the case of existing contracts, many importers are defaulting on payment deadlines, paying 30 to 45 days late. Exporters are advised to protect themselves from the risk of default by obtaining foreign buyer financing or export insurance from the
U.S. Export-Import Bank (see below for more information).
It can be difficult to collect from Mexican buyers in cases of non-payment. The U.S. Commercial Service in Mexico has supported U.S. companies in their efforts to obtain payment for products/equipment delivered, but it is often necessary to travel to Mexico to meet with the buyer and in many cases to hire a lawyer to handle the case.
U.S. exporters are advised to be cautious and seek counsel when negotiating contracts in Mexico. Once negotiated, be prepared for the unexpected as access to credit in Mexico is limited or costly. Moreover, 90 percent of the Mexican private sector is comprised of small- or medium-sized companies, most of which have limited access to credit.
For more information, see Web Resources in this section or contact the U.S. Commercial Service in Mexico City.
The Secretariat of Finance and Public Credit (SHCP), the National Banking and Securities Commission (CNBV), and Mexico’s Central Bank, the Bank of Mexico (BANXICO) are the principal regulators of the banking system. SHCP is concerned with institutional issues, such as licensing, and sets credit and fiscal policies. CNBV, a semi-autonomous government agency, is responsible for supervision and surveillance. BANXICO implements these policies and operates inter-bank check clearing and compensation systems. The Institute for the Protection of Bank Savings (IPAB, replacing the former institution FOBAPROA) acts as a deposit insurance institution. The Mexican Banking Association (ABM) represents the interests of Mexico’s banks.
Mexico’s commercial banks offer a full spectrum of services ranging from deposit accounts, consumer and commercial lending, corporate finance, trusts and mutual funds to foreign exchange and money market trading. Currently, 48 banks are operating in Mexico, seven of which (BBVA Bancomer, CitiBanamex, Santander, Banorte, HSBC, Inbursa, and Scotia Bank) control 78 percent of the market share by total assets. Mexico’s commercial banking sector is open to foreign competition. All major banks, except for Banorte, are under the control of foreign banks.
Following the 1994 peso crisis, banks in Mexico had been very cautious in their lending, preferring to provide loans only to their most sound customers. However, banks are now beginning to implement programs for lending to a wider range of companies, although at relatively high rates.
In general, small and medium-sized enterprises (SMEs) have trouble accessing credit.
According to a third quarter 2019 BANXICO survey of established companies, the companies’ main sources of financing were suppliers (76.0%), commercial banks (34.1%), other companies and/or their own headquarters (22%), foreign banks (5.6%), development banks (5.1%), and debt issuance (3.2%).
The Mexican Government has enacted several incentives to encourage more lending to SMEs, and banks have followed suit with new lending policies, but it remains to be seen whether the largest segment of the Mexican economy will gain better access to credit
At the end of March 2020, due to the COVID-19 outbreak, the Secretariat of Finance announced that commercial banks will be allowed to grant payment extensions up to four months with an optional two-month extension to individuals and SMEs for all type of consumer loans (auto, credit cards, personal loans, mortgage and commercial credit lines).
Mexican Payments System (SPEI)
One objective of the Central Bank is to promote the development of the Mexican payments system. The Central Bank supervises the operation of the Inter Banking Electronic Payments System (Sistema de Pagos Electrónicos Interbancarios or SPEI), not only for large but also for retail payments transactions and it also regulates the retail payments systems which include electronic funds transfers, card payments, direct debits and checks. SPEI is an electronic funds transfer system owned and operated by the Central Bank. The system has allowed participants to transfer money in real time since August 2004. The system is used for both large-value payments and low-value transactions such as payrolls and person-to-person transfers. SPEI is a hybrid system, clears operations every few seconds, and the results are settled immediately on the participants’ cash accounts.
Digital Payment System (Cobro Digital or CoDi)
In January 2019, BANXICO, SHCP, and CNBV announced a new payments system through QR (Quick Response) code. The system called Digital Charge (Cobro Digital or CODI) is part of the government efforts to increase financial inclusion and reduce the cash economy. CoDi’s users/customers must have a smartphone, and a level 2 bank account (accounts that can be open with customer’s basic information). The sellers must have a static QR Code, a smartphone to download the CoDi app (for face-to-face transactions) or a web page to generate the CoDi requests for online sales.
Mexican Financial Technologies (Fintech) Law
With about 400 fintech start-ups, Mexico is currently the largest fintech market in Latin America after Brazil. Most of the Mexican fintech companies focus on payments and remittances, personal financial management, crowdfunding and lending. According to Fintech Radar Mexico 2019 the segments with most activity and dynamism in Mexico are payments and remittances (20.1%), lending (20.6%), enterprise financial management (13%), crowdfunding (7.4%), insurance (6.6%), identity fraud (4.1%), digital banks (3.8%), trading & capital markets (3.3%), Digital banks (3.8%), and wealth management (2%).
Due to the growing importance of the fintech industry in Mexico, financial regulators drafted Mexico´s first financial technology regulation law to reduce operational risk, enhance transparency and improve security. On March 10, 2018 the Fintech Law was published in the Official Gazette. The law applies to four broad areas of fintech services: crowdfunding and P2P lending, electronic money services, virtual assets, and application programming interfaces (APIs). The law was drafted to foster financial inclusion, consumer protection, financial stability, competition, and financial integrity.
The law allows companies and financial entities to obtain a special temporary authorization to offer financial services using technological tools through a regulatory sandbox. The Fintech Law also mentions the creation of a Financial Innovation Group formed by financial authorities and the private sector to share ideas, discuss innovations in the financial arena between the private and public sectors, and achieve better planning and development of the law. The law also establishes that SHCP, CNBV, and BANXICO are the main regulators of the fintech sector.
The mission of development banks is to fill financing shortfalls in the commercial banking sector. Mexico has seven government-owned development banks that provide services to specific areas of the economy. The dominant institutions are Nacional Financiera (Nafinsa) and the National Bank for International Trade (Bancomext). These institutions have become primarily second-tier banks that lend through commercial banks and other financial intermediaries such as credit unions, savings and loans, and leasing and factoring companies. Nafinsa’s primary program funds SMEs and micro businesses. Nafinsa also undertakes strategic equity investments and contributes equity to joint ventures. Bancomext provides financing to Mexican exports and to SMEs. It also offers working capital, project lending, and training to firms in several specific sectors that require support, such as textiles and footwear.
The other Mexican development banks are Banobras (Banco Nacional de Obras y Servicios Públicos or National Development Bank for Public Works and Services), Rural Agriculture Bank (Financiera Rural), Bansefi (Banco del Ahorro Nacional y Servicios Financieros or National Savings and Financial Services Bank), Banjercito (Banco Nacional del Ejército or Mexican Army, Air Force and Navy Bank), and Hipotecaria Federal (which finances Mexican homeownership through financial intermediaries).
The non-traditional banking sector in Mexico is comprised of exchange houses, credit unions, leasing, factoring companies, and financial lending networks with multiple objectives (SOFOMs, for their legal corporate structure called Sociedad Financiera de Objeto Múltiple)). SOFOMs are divided in two categories: Entidades Reguladas, or Regulated Entities (SOFOM ER); and Entidades No Reguladas, or Non-Regulated Entities (SOFOM NR).
Due to the financial reform, regulation and supervision of SOFOMs has increased. SOFOMs have the obligation to maintain up-to-date information with the National Commission for the Protection of Users of Financial Services (CONDUSEF), and they are required to give information about their borrowers to at least one credit bureau.
may offer financial factoring, leasing, and loans and/or other credit services but they are not allowed to receive deposits from the public.
Foreign Exchange Controls
There are no controls on the transfer of U.S. dollars into or out of Mexico. This means that profits can be repatriated freely. However, to prevent money laundering, SHCP maintains a regulation governing the deposit and exchange of U.S. dollars in Mexican banks. Dollar transactions that are processed through on-line banking are not affected. According to the regulation, banks must observe the following limits:\
• Individuals who are account holders of the bank can deposit no more than USD 4,000 per month in all banking branches.
• National citizens who are non-account holders of the bank can deposit USD 300 daily, but no more than USD 1,500 monthly.
• Tourists who are not account holders of the bank can exchange no more than USD 1,500 monthly in cash.
Border and tourist-area businesses can exceed the USD 14,000 per month cash deposit limit if they meet three criteria. They must 1) have been operating for at least three years; 2) provide additional information to financial institutions justifying the need to conduct cash transactions in U.S. dollars; and 3) provide three years of financial statements and tax returns. The limit on individual account holders remains unchanged. There is no restriction on the sale of dollars. However, upon entering or departing Mexico, cash amounts of USD 10,000 or more must be declared and documented. For more information on the regulation in Spanish, see the Official Gazette notice.on this subject.
U.S. Banks & Local Correspondent Banks
There are many U.S.-based banks active in the Mexican market, particularly U.S. brokers and banks working with EximBank programs. The U.S. Commercial Service Mexico maintains a list of these banks. Please contact Sylvia Montano (Sylvia.Montano@trade.gov) for more information.