On Wednesday, the Mexican government inched closer to passing a law that would begin the process of phasing out cash payments and requiring digital payments.
The “Digital Economy Law” was first introduced by President Claudia Sheinbaum in early September and has since moved rapidly through official commissions and the Chamber of Deputies. Most recently, on October 14, the bill passed out of two Senate commissions and now awaits a full Senate vote in the coming weeks.
The bill is part of an ongoing effort by the Sheinbaum government and the Morena party to expand the digitization of Mexico’s economy. It instructs Mexico’s Ministry of Finance and Public Credit (SHCP) to designate which business sectors will eventually only accept digital and electronic forms of payment.
While Mexico already has existing digital infrastructure, such as the SPEI (Sistema de Pagos Electrónicos Interbancarios) and the CoDi and DiMo networks, the public’s embrace of these systems has been slow. The Digital Economy Law is aimed at increasing the use of such digital payment platforms.
However, in a country where somewhere between 80 and 90 percent of all transactions are done in cash, it remains to be seen how the law will be implemented and enforced. Some critics of the bill have argued that the language of the bill does not make it clear which types of businesses will be compelled to only accept digital payments.
Meanwhile, Sheinbaum and her party allies have said the measures will make life easier for Mexicans because “they do not have to bring cash” and will “be able to pay from the cell phone or through other mechanisms directly.”
At a press conference on September 24, Sheinbaum discussed the effort to limit the use of cash as she officially introduced the Digital Economy Law. Sheinbaum and the Morena Party claim the law will “help security, efficiency, and the formalization of shops and products by digitizing payments and reducing the use of cash.”
José Antonio Peña Merino, head of the Digital Transformation and Telecommunications Agency (ATDT), also spoke at the press conference and explained that the new Digital Economy Law will help accelerate digital payments. He noted that the Mexican government has already begun efforts to reduce the use of cash in “strategic sectors” such as gas stations and toll booths.
