What is Payroll Portability?
Payroll portability, or the ability to receive your salary deposit in your preferred bank account, is a right granted to workers under Mexico’s Ley para la Transparencia y Ordenamiento de los Servicios Financieros (LTOSF) and supported by the Comisión Nacional para la Protección y Defensa de los Usuarios de Servicios Financieros (Condusef).
How does it work?
To initiate the process, workers must ensure their chosen account is designated as the recipient account and verify that it falls under the bank’s products eligible for payroll portability, typically savings accounts. The process is free and should take no more than 10 business days, requiring only a valid ID and a bank statement from the current payroll source.
Advantages and Disadvantages
Joel Cortés, the General Director of Kardmatch, explains that payroll portability is beneficial for those dissatisfied with their bank’s service, security, or customer support. It is particularly advantageous for those who pay fees due to the lack of nearby ATMs.
- Benefits: Payroll portability allows workers to access better interest rates on investments, credit cards, and loans offered by banks as incentives for transferring their salary accounts. For example, Santander offers cashback between 1% and 3% when using their payroll card at participating establishments. Banco Azteca provides access to personal loans starting from 1,000 pesos and salary advances of 400 pesos. BBVA enables delayed debit card payments, and Scotiabank offers free insurance coverage.
- Drawbacks: Workers may worry about the delay in salary reflection on their new account. This depends on the time of payroll deposit; if it’s before 3 PM, the salary should reflect on the recipient account the same day. If deposited later, it will appear on the next business day. Plan your finances accordingly during quinquennial periods falling on Fridays or holidays, as it may take more than three days for your salary to arrive.
- Important Note: Payroll portability cannot be used to evade financial responsibilities such as bill payments, domiciled payments, or alimony. If you leave the job or employer, remember to close the original account to avoid incurring additional fees.
Who is Joel Cortés and Why is He Relevant?
Joel Cortés is the General Director of Kardmatch, a financial technology company based in Mexico. His expertise in banking and finance makes him a relevant voice when discussing payroll portability, as he provides insights into the benefits and considerations for workers seeking to change their salary deposit institutions.
