Economics Working Paper WP16108
Abstract: This essay analyzes the trends in payments in Mexico since 2002 and argues that there has been an important growth in the use of cashless digital payment instruments, namely the use of credit and debit cards, electronic funds transfers (EFTs) and mobile banking. However, the use of cash widely persists in the Mexican economy. The essay discusses the factors behind the persistence of the use of cash, and argues that low financial inclusion and informal economic activity are considered the main causes. Equally relevant is the fact that digital instruments are not a perfect substitute for cash as money yet, as it is the need to adequate payments services to the convenience and trust of segments of users, mainly population that still has little use or no access to financial services.