The Digital Economy Law for Digital and Electronic Payments has come into effect in Mexico amidst criticism suggesting that the regulation may be unconstitutional and could exacerbate exclusion within the country’s economic system. Introduced in September by President Claudia Sheinbaum, the initiative aims to enhance the use of tools such as debit and credit cards, bank transfers, direct debits, QR codes, and NFC technology for both commercial transactions and governmental processes.
Proponents of the law assert that its purpose is to bridge the gap between available infrastructure and its effective use, enabling all individuals to make digital payments. This assertion is reflected in the presentation document accompanying the initiative.
Key Provisions of the New Law
Among its various stipulations, the legislation mandates that the digital CURP (Unique Population Registry Code) must be accepted as a valid means of verifying the identity of individuals wishing to engage in financial services via electronic platforms. However, it also clarifies that individuals may employ other official documents to meet this requirement.
Additionally, the law introduces the concept of the Digital Citizen File, designed to facilitate financial institutions’ access to documents and digital information of individuals seeking to utilise such services, provided prior authorisation is granted. The information contained within this file will carry the same legal weight as its physical counterparts, and citizens will have the right to request its consultation and portability.
The new legislation empowers the Ministry of Finance and Public Credit (SHCP) to identify strategic sectors or relevant activities where digital and electronic payments will be the sole method for settling transactions. The conditions, requirements, and operational rules governing these areas remain unspecified, with the ministry given a 15-day window to define these aspects.
It is noteworthy that the regulation includes an exception; in situations where a contingency prevents the acceptance of digital payments, the temporary use of cash or cheques will be permitted. However, such instances cannot evolve into a permanent practice.
Implications for Government and Businesses
Furthermore, the legal framework encourages authorities at all levels of government to adopt electronic and digital payment methods for services and transactions, while suppliers of goods and services are invited to integrate these methods into their operations. Public agencies and establishments will need to establish the necessary infrastructure, inform users about available options, and implement mechanisms to address contingencies that may temporarily hinder the acceptance of these payment modalities.
The law also redistributes responsibilities among financial and technological authorities. The Bank of Mexico is tasked with regulating the operational levels of sight deposit accounts to create suitable alternatives for various segments of the population, developing tools to facilitate electronic transfers, standardising user experiences across financial applications, and working with the National Banking and Securities Commission (CNBV) to ensure that terminals accepting card payments also accommodate QR codes, following the technical and operational specifications set by the central bank. The CNBV will supervise compliance with these new regulations.
Concerns Over Effectiveness and Constitutionality
Since its approval by legislators in October, the effective implementation of the law, its scope, and the potential economic impact on micro, small, and medium-sized enterprises (MSMEs) and consumers have raised concerns. In a statement released at the end of last month, Banamex cautioned that while the law aims to respond to the evolving banking landscape, it may also create exclusionary situations due to low levels of financial inclusion, connectivity gaps, digital capability disparities, and user distrust towards electronic means. These factors contribute to cash remaining the predominant payment instrument in the country.
“Having infrastructure does not guarantee its adoption. The effectiveness of the law will depend on bridging the gap between formal access to financial instruments and their everyday use, particularly among micro businesses, informal workers, and regions with lower connectivity, as well as addressing the risks associated with its implementation,” stated the banking institution.
Legal and Academic Perspectives
Various academics have also expressed concerns regarding the constitutionality of the law, particularly in relation to the powers granted to the SHCP. Juvenal Lobato Díaz, a constitutional law professor at the National Autonomous University of Mexico (UNAM), stated in an interview that the regulation delegates to an administrative authority the power to determine which economic sectors must exclusively accept digital payments without establishing sufficiently precise criteria beforehand.
“I believe the argument could be valid that this delegation does not align with the Constitution because it is the responsibility of Congress, not an administrative authority, and this could also mean discretion in its exercise,” he clarified.
During a seminar titled “Digital Economy Law for Digital and Electronic Payments,” organised by the UNAM’s Institute of Legal Research on 3 November, various experts noted that while electronic payments can facilitate income and transaction recording, promote access to formal credit, and contribute to financial inclusion, their adoption is contingent on factors such as operational costs, connectivity, availability of banking services, and administrative requirements.
In these discussions, Lorena Rodríguez León, director of the Faculty of Economics at UNAM, warned that the law could infringe on users’ privacy and financial autonomy. “The ability to conduct transactions without banks or other actors knowing every financial movement is part of those preferences [for cash],” she noted.
According to projections from the Bank of Mexico for 2025, published last month, 98% of the Mexican population relies on cash for their daily expenses. In this context, it remains to be seen what guidelines the SHCP will issue to determine in which businesses, activities, and services cash will no longer be accepted as a payment method. The content of these guidelines will be crucial for anticipating the law’s implications and assessing whether the necessary conditions exist for its effective implementation in the country.