High levels of informal employment and cultural habits are preventing digital payments from replacing cash as the primary transaction method in Mexico.
This trend creates a significant barrier for financial inclusion and economic modernization. While fintech companies aim to digitize the economy, the persistence of cash limits the growth of credit and formal banking services for millions of citizens.
Fintech companies have invested hundreds of millions of dollars [1] in attempts to displace cash. However, these investments face a steep climb due to the structure of the Mexican workforce. The informal labor rate in Mexico stood at 55.4% in the third quarter of 2025 [2].
This widespread informality means a majority of workers operate outside the formal tax and regulatory systems, making cash the most practical tool for daily commerce. The reliance on physical currency is not only a professional necessity but also a cultural preference that persists despite the availability of digital alternatives.
Banking executives have noted that this environment stifles financial expansion. Eduardo Osuna said the primary inhibitor of credit growth in the country is the use of cash and informality [3]. This sentiment is shared by other industry leaders, including Emilio Romano, the president of the Association of Banks of Mexico, who said there is a need to reduce cash usage in the economy [4].
Seasonal trends further illustrate the depth of this reliance. During the final week of December 2025, cash usage increased by more than 36 billion pesos [5]. This surge highlights how traditional spending habits during holidays continue to outweigh the push toward digital wallets and electronic transfers.
Despite the aggressive push from the tech sector, the combination of a large informal economy and a deep-seated trust in physical currency keeps Mexico's financial system anchored in cash.
“The informal labor rate in Mexico stood at 55.4% in the third quarter of 2025.”
The dominance of cash in Mexico reveals a gap between technological availability and structural economic reality. Because more than half of the workforce remains informal, digital payment tools cannot solve the underlying issue of financial exclusion. Until the government or private sector addresses the root causes of labor informality, fintech investments will likely see diminishing returns as the population continues to rely on currency that exists outside the digital ledger.
