The New ABM President’s Vision for a Cashless Economy
Emilio Romano, the newly appointed president of the Asociación de Bancos de México (ABM), has outlined a strategic vision to reduce cash usage and promote digital financial services. This approach aims to foster greater financial inclusion, expand credit access for small and medium-sized enterprises (SMEs), and decrease financial fraud.
Current Cash Usage in Mexico
According to a study by Banco de México (Banxico), approximately 90% of the population still relies on cash for daily expenses. Meanwhile, only 17% uses debit cards, 4% uses credit cards, 3% opts for electronic payments or SPEI (transferencia electrónica de fondos), and a mere 0.2% uses CoDi (compra en línea con tarjeta de débito).
Limited Access to Credit for SMEs
The ABM reports that only 24% of Mexican SMEs have access to formal credit. To address this issue, Romano has committed to increasing this figure to 30% by 2030, in collaboration with the government.
Positive Outcomes of Reducing Cash Usage
Financial Inclusion: By decreasing cash usage, digital financial services will become more prevalent. This shift will encourage the creation of digital accounts and efficient payment mechanisms, ultimately promoting financial inclusion.
- Improved Financial Information: Digital transactions provide better financial data for both individuals and businesses, which can be used to enhance credit bureaus and expand credit access.
- Formalization of the Economy: Greater financial visibility allows businesses to grow and maintain a stronger presence in the market, as formalized companies can expand more rapidly.
- Reduced Fraud and Lower Transaction Costs: Digitalization decreases the risk of fraud and lowers transaction costs, making it easier to combat money laundering and terrorism financing.
Efficient Digital Payment Mechanisms: Romano emphasizes the need for more efficient digital payment and collection systems, which will lower costs associated with card acquisition and issuance, as well as boost the adoption of CoDi (compra en línea con tarjeta de débito) and Dimo (digital wallet).
ABM’s Role in Promoting Digitalization
The ABM aims to champion these digital initiatives in the coming years, as approximately 90% of Mexico’s population still predominantly uses cash for daily transactions. By prioritizing digitalization, the ABM seeks to create a more inclusive financial system and support the growth of SMEs.
