High levels of labor informality are preventing fintech companies from replacing cash as the primary payment method in Mexico.
This trend persists despite hundreds of millions of dollars [3] in investments aimed at digitizing the economy. The reliance on cash limits the growth of credit and prevents a significant portion of the population from accessing formal financial services.
Data from the third quarter of 2025 shows that Mexico's labor informality rate reached 55.4% [1]. This represents an increase of 0.8% [2] over the previous quarter. This structural challenge creates a barrier for digital payment providers, as a majority of the workforce operates outside formal tax and employment frameworks.
Industry leaders suggest that the cultural preference for cash and the scale of the informal sector are the primary obstacles to modernization. Eduardo Osuna said the main inhibitor of credit growth in the country is the use of cash and informality [4].
Financial institutions and industry associations continue to push for a reduction in cash dependency to stabilize and grow the economy. Julio Serrano Espinosa said he fully agrees with Emilio Romano, president of the Association of Mexican Banks, on the need to reduce the use of cash in the economy [5].
Fintech firms have attempted to bridge this gap by offering simplified digital wallets and micro-loans. However, the lack of formal documentation and steady, verifiable income for more than half of the workforce makes traditional risk assessment difficult. This cycle keeps the economy tethered to physical currency, a system that favors anonymity but restricts systemic financial growth.
“The main inhibitor of credit growth in the country is the use of cash and informality.”
The persistence of a cash-heavy economy in Mexico highlights a gap between technological capability and socio-economic reality. While fintech infrastructure is available, the 55.4% informality rate creates a systemic barrier that digital tools alone cannot solve. Until structural labor reforms or new credit-scoring models address the informal sector, Mexico's financial digitalization will likely remain limited to urban centers and formal employment hubs.
