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Officials say Mexico’s credit card monopoly harming cross-border trade

Country’s only 2 clearinghouses, E-Global and Prosa, process 7 billion transactions annually

Mexico’s top banks have controlled the country’s two clearinghouses for all credit card transactions for decades, hobbling innovation and foreign trade, experts said. (Photo: Jim Allen/FreightWaves)

Mexico is discriminating against U.S. bank card suppliers and homegrown financial technology companies in favor of state-owned enterprises, industry experts say.

“There is a lack of market access for payment processing in Mexico,” Brian Pomper, the executive director of the Washington-based Alliance for Trade Enforcement, told FreightWaves.

The alliance is a coalition of trade associations and business groups advocating for foreign governments to end unfair trade practices. 

Pomper, along with other critics from Mexico’s financial technology sector, have urged Mexican authorities to end what they contend is a monopoly in the country’s credit card payments industry that favors the country’s largest banks, while shackling trade, innovation and startups.


For decades, Mexico’s top banks have controlled the country’s two clearinghouses for all credit card transactions, E-Global and Prosa. Together, E-Global and Prosa handle about 7 billion credit card transactions annually in Mexico.

“Visa and Mastercard are doing business in Mexico, but they’re being inhibited by Prosa and E-Global,” Pomper said. “U.S. companies feel that they have a lot more to offer than is currently being allowed under the strictures by which they’re allowed to operate.”

Julio Madrazo, a founding partner of Mexico City-based De la Calle, Madrazo, Mancera (CMM), said the monopoly of the credit card processing system is hurting foreign investment in Mexico in the long run. CMM is a consulting firm specializing in economy, regulatory processes and international trade.

“Although Mexico currently has an extremely efficient cross-border trade, it would be undoubtedly beneficial to increase competition in the payment system to have more alternatives regarding clearinghouses, have clearing houses that, due to competition, invest aggressively in innovation, technology and try to provide more price competitive services,” Madrazo told FreightWaves.


The Fintech Mexico Association, a group of Mexican financial technology companies, recently sponsored a report published by CMM that concluded that E-Global and Prosa act as just one network, running like a monopoly. 

Fintech Mexico’s study echoes a 2020 report from the country’s Federal Competition Commission (COFECE) that E-Global and Prosa’s monopoly on credit card payment processing is hobbling the nation’s economic growth and small businesses.

“COFECE clearly stated in its 2020 investigation, among other aspects, that there are no conditions of competition in the card payment network,” Ernesto Calero, general director of the Fintech Mexico Association, told FreightWaves. “The direct consequence of this is a considerable lag in the adoption of new technologies that would help provide innovative, lower-cost solutions to foster financial inclusion.”

Mexico’s credit card payment industry started with E-Global and Prosa 

Credit card clearinghouses are networks that validate and finalize transactions between buyers and sellers in a market, as well as provide data security wherever a card is used.

The global credit card payment market was valued at $478 billion in 2021, according to ResearchandMarkets.com. The market is projected to reach a value of $ 762 billion by 2027.

Global credit card transactions totaled 581 billion in 2021, up 24.5% year over year, according to the Nilson Report. Mexico’s credit cards and payments market totaled $149 billion in 2021. 

Some of the largest global players in the credit card clearinghouse industry include Mastercard, Visa, American Express, Bank of America, Barclays, Capital One, Citigroup and JP Morgan Chase & Co.

The two clearinghouses operating in Mexico — E-Global and Prosa — are owned by the country’s largest banks. Each of these banks and financial institutions provide the majority of credit cards and debit transactions in the country.


E-Global, which started operations in 1998, is the property of BBVA Bancomer and Citibanamex. Prosa was founded in 1968 and is owned by HSBC México, Santander México, Scotiabank, Banorte, Invex and Banjército. E-Global handles about 2.6 billion transactions a year. Prosa processes over 4.7 billion transactions annually, accounting for more than 60% of the Mexican market. 

Mastercard was granted operational authority in Mexico in 2019, while Visa received authorization from the nation’s central bank to operate as a clearinghouse in 2020. However, Visa Mexico and Mastercard Mexico have not yet become operational as payment clearinghouses in the country.

Calero said while Visa and Mastercard have been granted the license to operate in Mexico, neither have been given the framework to provide domestic network-processing services.

“Prosa and E-Global, together with the issuers and acquirers that are members of the Association of Mexican Banks [i.e. the banks that own both clearinghouses] get to decide on any changes to the contract that govern the conditions of participation in the payment network,” Calero said. “In other words, any changes to the domestic exchange contract are determined by these participants, without others [such as Mastercard, Visa or issuers, acquirers, and aggregators that are not members of the Association of Mexican Banks] being able to give their opinion on the matter.”

E-Global, Prosa, Visa and Mastercard did not respond to a request for comment from FreightWaves.

Madrazo said since E-Global and Prosa are so large in Mexico, it also makes it impossible for new financial institutions — either traditional banks or fintechs — entering the nation’s market to choose a clearinghouse that is fully independent of either of them.

“Furthermore, banks that own Prosa and E-Global enjoy a centralization of costs [given their ownership of both clearing houses], which is an advantage other banks [usually, smaller] and other fintechs do not enjoy,” Madrazo said. 

Another advantage E-Global and Prosa provides for its owners is giving the banks access to information that other financial institutions or startups don’t have, granting a competitive edge. 

“Shareholder banks’ co-ownership of clearinghouses gives them access to information from other participants, which constitutes an undue advantage since they can anticipate and counteract the business strategies of their competitors,” according to the 2020 COFECE report. 

More clearinghouses could foster innovation and growth

The Fintech Mexico Association hopes regulators will eventually enforce COFECE’s 2020 recommendation that the eight banks that own E-Global and Prosa should divest 51% of their ownership of both clearinghouses.

“The Fintech [Mexico] Association firmly supports COFECE´s recommendations and believes that these measures are necessary in order to achieve true competition in the card payments

industry,” Calero said. “In addition, the domestic exchange contract should be ruled and enforced by a non-bank entity, and banks that have dominant position in both issuing and acquiring should be forced to divest one side of the business [issuing or acquiring].” 

Calero said if Visa and Mastercard and other financial technology startups are able to operate under standards that resemble those used in other markets, such as the U.S., Mexico could see a change in its digital payment landscape.

“Visa and Mastercard could enable innovative technology that is needed to tackle the large opportunity that cash payments represent in the market,” Calero said. “Today, as per a study from Visa, only 18% of payments are done by electronic means in Mexico. Compared with other Latin American markets like Brazil, Chile and Colombia, which have less than 30% penetration of electronic payments, Mexico is really behind.”

Since the COFECE study was published in 2020, the Mexican government has done little to make any changes. Madrazo said the government’s inaction is discouraging.

“We believe it is a combination of different reasons — first, antitrust enforcement is relatively new in Mexico [since the first antitrust authority was created in 1992],” Madrazo said. “Second, as to date, COFECE lacks three commissioners. It’s supposed to have seven, but it’s currently working with only four.”

Madrazo said for unclear reasons, the government has delayed sending commissioner candidates to the Mexican senate. 

“Last, but not least, it does not seem that the current COFECE administration has the drive to pick up a fight with the largest banks of Mexico,” Madrazo said.

Pomper said for Mexico to allow more inclusion into its financial system would be good for everyone. He remains hopeful that changes could be made on the horizon.

In July, U.S. Trade Representative Katherine Tai highlighted the importance of American electronic payment services companies being able to fully participate in Mexico’s market during a meeting with Mexican Economy Minister Tatiana Clouthier.

“We feel very strongly that if you allow more companies into the market, that it will help with financial inclusion in Mexico,” Pomper said. “It will help with economic recovery and economic development. It will allow more companies to employ their modern technology that protects more effectively against fraud and financial networks. It will expand trade and help improve North American competitiveness.”

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Noi Mahoney

Noi Mahoney is a Texas-based journalist who covers cross-border trade, logistics and supply chains for FreightWaves. He graduated from the University of Texas at Austin with a degree in English in 1998. Mahoney has more than 20 years experience as a journalist, working for newspapers in Maryland and Texas. Contact nmahoney@freightwaves.com