Markets and Trade, Money

Cash, Please

Although cashless payments are increasing in Mexico, cash use remains essential in the local economy

Mexican notes and coins

Cashless forms of payment for retail purchases have overtaken paper and coins in the USA, Canada, and much of Europe. However, cash in notes and coins remains king in Mexico — even with the recent surge here in adoption of electronic banking services — whether you are buying food, goods, or services.

The use of credit and debit cards is widespread in Mexico — with payments using smartphones nascent — and although working-class Mexicans are increasingly using plastic cards, cashless payments are predominantly made by the middle and upper social classes, and even they continue to make extensive use of cash.

At least half of Mexican households still don’t have a bank account and rely entirely on the country’s cash-based economy for their trades. Online banking is gradually being taken up, but there still remains a cultural preference for cash, underlined by a Bank of Mexico study revealing that a significant majority of Mexicans with debit cards use them simply to withdraw their wages in cash from ATMs. Cash thus remains a widely employed, and oftentimes preferred, form of payment in Mexico.

To underline the continuing importance of cash in the local economy, major online brands including Amazon, Apple, Google, and Uber offer cash-payment options to customers in Mexico either by direct payment in cash at a bank, or by means of prepaid cards which can be purchased using cash and spent online.

Here is a summary of everyday situations where cash and cashless payments are currently used in Mexico:

Taxi Fares: Some taxi firms in Mexico City will open an account for you and accept payment using a debit or credit card, although with the advent of App-Cab services like Uber and Cabify, fares are billed to your credit or debit card anyway. (App Cab companies have recently introduced the option to pay drivers using cash.) Independent street taxis in the capital and local cabs operating in smaller towns and villages across the country will only accept cash.

Car Fuel: Not too long ago, gasoline and diesel purchases were a cash-only trade in Mexico; however, with recent modernization and the opening-up of Mexico’s oil and gas markets, most gasoline stations now take card payments. (Non-Mexican bank cards might be problematic, we have mixed reports, but the situation appears to be improving.)  Even with card payment options available, substantial numbers of people still pay with cash to fill the tank in their automobiles. It’s wise to make sure you have some cash with you on your road trip in case the station you stop to refuel at doesn’t accept cards, or (more likely) their card payment system is off-line. We also strongly recommend that if you use plastic to pay for gasoline in Mexico, use a credit card instead of a debit card and don’t let the card out of your sight as gasoline stations are one of the places where ‘bank card skimmers’ are known to operate.

Tolled Roads: Since January 2019, payment booths on tolled highways across Mexico only accept cash or electronic toll-booth tags in the windscreen; debit and credit cards are no longer accepted.  Drivers who often use tolled roads will buy an electronic “tag” to place in their windshield which can be prepaid using cash, or linked to a credit card.  If you plan to use Mexico City’s “second level” ring-road system (Segundo Piso), you’ll need to purchase a windshield tag and prepay a balance to it, or link the tag to your credit card; cash is not accepted.

Electricity Payments: Many people continue to pay their bi-monthly electricity bills using cash, although electronic payments using online banking are becoming increasingly common and it’s more convenient than using cash. The electricity company runs ATM stations in towns and cities across the country where electricity bill payments are accepted: the machines will take cash or bank cards in payment. Your home electricity bill can also be settled using the electric company’s app, ‘CFE Contigo‘, using a debit or credit card.

Natural Gas: Payments for delivery of natural gas to residential homes are often settled using cash. In Mexico City, you can have gas piped into your home in certain neighborhoods and the company that supplies that gas will accept various forms of e-payment in addition to cash. However, the overwhelming majority of residents in Mexico have a gas tank (portable tanks or the type that are installed on the roof or in the garden of the home) which are filled by passing gas-tanker trucks. Some gas distribution companies now take card payments in addition to cash; however, you should tip the tanker-truck operators in cash.

Situations in Mexico where CASH-LESS payments are readily accepted

All major supermarkets and department stores, shopping mall stores, most restaurants in bigger towns and cities, main car dealerships, furniture and electrical goods stores, some food and beverage chains (like Starbucks), bus companies, travel agencies, most professional services (e.g. doctors, dentists, lawyers — but check, especially in smaller towns), and pretty much all other businesses catering specifically to the middle and upper classes actively accept payment by credit and debit card—and some also accept smartphone payments.  Some smaller traders (and even some market traders) are beginning to accept card payments using a smartphone app that’s linked to a bank’s payment system. Mobile phone companies will allow you to top-up your prepay phone balance using a credit or debit card—online, or directly using your phone.  Note that using the second-level Mexico City’s “second level” ring-road system requires use of a electronic tag in your windshield: it can be pre-paid using cash, but cash is not accepted at any of the entry points.

Situations in Mexico where CASH is still required

There are many instances in Mexico where only cash will do: local independent convenience stores; open-air markets; independent street cabs, shoe-shine stalls; buying trinkets from ambulant vendors; street food; confectionery, newspapers or tobacco purveyed by corner stalls; buying anything in small shops and stalls in rural towns and villages; paying your domestic help (e.g. maid, gardener, pool maintenance). Some trades people, for example, plumbers, electricians, and carpenters will accept cashless payments for larger jobs in the form of a money transfer to a local bank account, but the majority of routine jobs—especially ad-hoc work like fixing a leaking tap—are strictly on cash terms.  Highway toll booths also require payment in cash unless you have a payment tag in your windscreen.

Tipping: Cash is also essential for tipping in Mexico.  You should always tip in cash and in Mexican pesos only – our guide to tipping explains why.  If you visit Mexico on a tour package and spend your entire stay at a resort, then you may not have a call to use much cash (although take note above about tips); but most visitors discover that at least a few occasions arise where the use of physical cash is an absolute necessity.

Vacation Souvenirs: When touring, cash is essential to get around on local transport, and to buy local souvenirs or anything from street traders or stores ‘off the beaten track’.  Some market traders are beginning to accept card payments using a smartphone app but most only accept cash, and those that accept cards prefer cash to avoid the fees the bank charges them to take an electronic payment.  Some small traders make a surcharge (usually 5%) if you pay using a card, to cover their bank fees; alternatively, they may offer a discount if you pay using cash.

Archaeology Sites and Museums: Except for the country’s more popular archaeology sites and museums, payment for entry is only accepted in cash.  INAH, the institute that manages the country’s archaeology centers and museums, has been rolling-out electronic payment options at the larger and most visited centers and museums and in due course all centers are likely to take electronic payment for entry; but for now, be sure to carry some cash with you in case the center you visit doesn’t take payment by debit or credit card.  If you hire a local guide at the center, they will require payment in cash, even if the center accepts payment by credit/debit card.

Notwithstanding the increase of cashless payments in Mexico, whether you’re just visiting or living here, you’ll soon discover that in practice there is a constant and continuous need for cash as you go about your days, and you might also find that making change is a continual pastime.

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