The Sector in 50 charts – A Deep Dive into Payments Trends in Mexico
Despite remaining flat recently, total Mexican card volumes are already comfortably above pre-pandemic levels. As the number of transactions increases, @AlonsoGarcia and team observe average transaction tickets decline in real terms.
Interestingly, the issuance side has not propelled increased card transactions. Issuers have exhibited sluggish growth rates (both in the number of deposit and credit card accounts). Instead, growth in card volumes seems to be boosted by strong growth in PoS terminals.
Growth in e-commerce card volumes has come in tandem with the e-commerce growth. E-commerce transactions represent an increasing share of total card volumes. Democratization of e-commerce has resulted in rapidly declining average tickets, driven by a shift to debit cards among other factors.
Merchant Discount Rate (MDR) for debit cards in Mexico continues to be considerably above that in Brazil. And while the MDR for credit cards currently stands at the same level as Brazil, the pace of decline observed over the past few years is much milder in Mexico. In this context, we note that sub-acquirers are currently subject to the highest levels of MDR (both in credit and debit). Still, sub-acquirers stand as a lower-cost option for more minor (but increasingly larger-sized) merchants.