Banks implored to break up Mexico’s credit card ‘near-monopoly’

The Mexican high court has ordered medical professionals to accept credit and debit cards. Photo: Getty

The two firms handling Mexico’s debit or credit cards transactions represent a near-monopoly, regulators said Wednesday.

They recommended that leading banks be forced to sell off their ownership share in the companies.

While many banks issue cards in Mexico, only two firms actually process electronic transactions. Eight private Mexican banks gained an unfair advantage by owning a large share of the settlement and processing firms, the federal Commission on Economic Competition ruled.

The result: high processing fees and a reduced incentive for investment in new and safer systems to handle transactions and avoid system glitches or failures.

High fees and poor service have kept many consumers and small businesses out of the card transaction system.

Mexican credit and debit card systems are prone to breakdowns, discouraging card use while making consumers more vulnerable to fraud.

The commission cited the extremely lengthy and unclear requirements for new firms seeking to enter the market, and called on the government to ease the entry of new competitors, The Associated Press reported.

Yucatán Magazine

Yucatán Magazine is a news and information source for people who love it here. Sign up for the Yucatán Roundup, a free newsletter, which delivers the week's top headlines every Monday.