Introduction to the CID and its Relevance
In recent discussions about caps on exchange quotas and the operation of payment networks in Mexico, the spotlight has once again fallen on a crucial component of the card payment system: the Domestic Exchange Contract (CID). This instrument centralizes the rules, fees, and conditions governing electronic transaction exchanges within the country, playing a pivotal role in how costs, risks, and incentives are distributed across the payment ecosystem.
The CID: Defining Payment Transaction Rules
In Mexico’s national card payment system, the rules dictating transaction processing, who pays whom, cost distribution, and each party’s responsibilities do not stem directly from public regulation.
Instead, these conditions are established through agreements among system participants, primarily card issuers (institutions that issue and manage cards for users) and acquirers (entities responsible for enrolling merchants and processing payments they receive). According to a study by the Association of Payment Media Aggregators (Asamep), this agreement is formalized in the CID.
The CID includes negotiated exchange quotas and conditions for inter-clearing chamber exchanges, which are entities responsible for settling and clearing operations between banks and other intermediaries, operating under authorization from the Bank of Mexico.
Practical Implications of the CID
In practice, the CID sets conditions for participation in Card Payment Networks, including exchange quotas. These rules apply to issuers, acquirers, aggregators, and companies operating within the Red MX infrastructure, which enables a card transaction to flow from the merchant to the issuing institution, passing through acquirers and clearing chambers.
Although all these actors are obligated to comply with the CID, not everyone has access to its content or participates in its creation or modification.
The non-public nature of the document implies that certain ecosystem actors, particularly payment media aggregators facilitating card acceptance for small and medium-sized businesses, are excluded from defining the central system rules.
Key Questions and Answers
- What is the Domestic Exchange Contract (CID)? The CID is a central contract in Mexico’s card payment system that outlines the rules, fees, and conditions governing electronic transaction exchanges.
- Who are the main participants in defining CID rules? The primary participants are card issuers and acquirers, who negotiate and formalize the CID.
- What does the CID cover? The CID covers exchange quotas, conditions for inter-clearing chamber exchanges, and rules applicable to issuers, acquirers, aggregators, and companies within the Red MX infrastructure.
- Who is excluded from accessing or modifying the CID? Payment media aggregators facilitating card acceptance for small and medium-sized businesses are typically excluded from accessing or modifying the CID.
