Mexico’s New Digital Law: What Happens to Cash?

The Mexican Senate has approved the Digital Economy Law for Digital and Electronic Payments, proposed by President Claudia Sheinbaum, with the aim of reducing the use of cash in a country where half of workers operate in the informal sector and almost all transactions are carried out using banknotes and coins.

The law was introduced as part of the 2027 Economic Package to contribute to the strategy of increasing the State’s tax revenue without implying a general tax reform. However, the population’s deep-rooted preference for payments using banknotes and coins has generated various concerns, both among individuals making payments and those conducting business transactions.

What Comes Next With the Law

After its approval in the Senate, the law must be published by the Executive Branch in the Official Gazette of the Federation. From that moment, the Ministry of Finance will have 15 days to determine the sectors or industries in which only this payment method will be accepted.

There are concerns that some businesses may not be fully equipped to comply with these regulations. “Cross-cutting sectors such as gasoline, LP gas for households and telecommunications,” said Rolando Alamilla, director of the analysis firm Spectrum Intelligence. “This is because of the basic needs they represent for households, where a proper transition process must be considered,” he said in an interview.

Will Cash Be Prohibited?

No. However, Mexico aims to reduce the number of transactions. According to the article, 94% of payments made in the country are in cash, compared to 22% made through transfers or mechanisms such as SPEI, the Interbank Electronic Payment System; CoDi, Digital Collection; or DiMo, Mobile Money.