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tseeger

Mar 30, 2009, 5:04 PM

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Trust of banks and money in Mexico

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Hello to all,

I am a student at the University of Texas and am doing a project for my Spanish class in which I am trying to learn the cultural differences between the US and Mexico.

Particularly I am interested in people's trust of banks and money.

If you could give me any insight into how people in Mexico view banks and money, I would be forever grateful. I would really love to learn if people in Mexico are willing to give their hard earned money to a bank and trust that it will be there later, as so many people in the United States do on a regular basis.

In general, do people in Mexico have bank accounts?

Do businesses accept checks or credit cards?

Any information at all will help me a lot.

Thanks for all your help!

Sincerely,
Ted Seeger

Anonimo

Mar 31, 2009, 1:30 AM

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Re: [tseeger] Trust of banks and money in Mexico

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I would really love to learn if people in Mexico are willing to give their hard earned money to a bank and trust that it will be there later, as so many people in the United States do on a regular basis.

In general, do people in Mexico have bank accounts?

Do businesses accept checks or credit cards?

Although we live in Mexico, I'm no expert on whether people trust their money to banks, other than what I see in Pátzcuaro and Morelia.
I see many people banking, waiting in line for tellers, or using the ATM. From my small peephole into life in Mexico, I'd say, "yes" to your question #1.

My experience is that most businesses do not accept checks, although we've never written one on our checking account to find out.

Credit cards: small, Mom and Pop businesses do not accept credit cards. The fees are tooo high, I presume, and it's a strong possibility that the businesses prefer not to leave a paper trail for the Hacienda (Mexico's IRS).

Larger businesses often limit the use of credit cards other than those with their brand, issued by their partner banks, OR charge a surcharge on credit card purchases. Examples, Costco, Wal-Mart Mexico.

Debit cards can be used freely at larger stores and carry no surcharge. We are often asked if we'd like to "retirar efectivo", or get extra cash when paying with a debit card. I have never done so.

Annother peculiarity of the banking system is that some accounts in some banks carry a monthly "rental" fee, plus tax! Although this practice may vary with specific banks, it's very hard to swallow a fee, however small, for the bank to use my money!

Saludos,
Anonimo

Rolly

Mar 31, 2009, 8:12 AM

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Re: [Anonimo] Trust of banks and money in Mexico

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"I see many people banking, waiting in line for tellers, or using the ATM."

These lines at the ATMs are not an indicator of people having bank accounts. Many government agencies and large companies pay their employees electronically. Each worker has a special account into which his pay is deposited. The money can be withdrawn only at an ATM; it is not a checking account. Regular bank accounts are not common except for businesses and high salary people.

México is still largely a cash society. Few businesses accept checks. Credit cards are not widely used because of the very high interest rates. Many stores have their own credit systems.

Rolly Pirate

(This post was edited by Rolly on Mar 31, 2009, 8:13 AM)

jerezano

Mar 31, 2009, 9:55 AM

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Re: [Rolly] Trust of banks and money in Mexico

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Hello Ted,

Rolly's answer about bank accounts here in Mexico confirms my own experience of some twenty years here.

First of all, Banks here in Mexico charge some of the highest transaction fees in the world and they fee almost all transactions. They also charge some of the highest interest rates in the world whether on Credit cards, Debit cards or loans. They also pay some of the lowest interest rates on savings accounts. An example is Bancomer demanded a monthly fee to use on-line banking which is actually a convenience to the bank. That was some 3 years ago. Whether they still do or not I don't know.

Also the banking regulations and as mentioned earlier the fees are so complicated that maintaining a bank account here can be a chore. For example, some banks charge fees to withdraw money from a savings account. Other banks charge ATM fees for withdrawing money with an ATM card from an account within that bank itself. Other banks charge monthly fees for maintaining a small savings account, etc. Most banks freeze a savings account that has not been active for more than 90 days. Some banks then start charging a monthly maintenance fee until that account is reactivated. So it is possible that over time the savings account just evaporates.

And then relationships between the mother bank and branch banks scattered country wide are not so complete as in the United States. For example I have a $60,000 peso savings account with Bancomer here where I live. I went to Tepic on vacation and wanted to withdraw some money from that account using my debit card. I was refused at the ATM. I visited a bank officer at a Tepic branch of Bancomer and was informed that the account had been frozen because of inactivity. Two and a half impatient hours later after that officer had sent faxcimile images of my ATM card to my bank in my home town and after three long distance calls I was finally allowed access to my own money. Too, the few checks on Mexican banks which I have received were not possible to cash at any bank but only from the issuing bank or branch and usually if a branch that branch had to make a call to the issuing bank to verify that money was available in the account.

Now with all that said, the private citizen (not a business man or firm of some type) usually does not have a bank account, either savings or checking. Not one of my personal friends has a bank account. I do have a friend who runs a Casa de Cambio. His bank is in the United States. He does not maintain a mexican bank account.

So give me a reason to open a bank account here in Mexico. The average Mexican citizen sees no reason to do so.

Credit cards are a different matter and while the interest charges are absolutely abusive, the banks have made a whale a lot of money with them until recently when due to the economic downturn they have become a real problem for all banks because of late payments, no payments, escalating interest rates and other problems.

jerezano

mcm

Mar 31, 2009, 10:30 AM

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Re: [tseeger] Trust of banks and money in Mexico

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Just as in other countries, people's attitudes towards banks, etc. vary depending on where they live, especially urban vs. rural areas. For example, in Yucatan state, where I live, there are few if any banks in towns in the interior of the state -- therefore people are less likely to have bank accounts. There are some rural "savings and loan" type of institutions (Sistema Coopera is one here in Yucatan) that have a wider distribution -- these are more like credit unions, where you become a member and establish a savings account.

On an anecdotal level, some campesino neighbors of mine had put about 30,000 pesos in a bank account, but had major problems withdrawing it because of a problem with the account holder's fingerprints -- they would not scan, and therefore she could not access her money at this particular bank. The personnel were not very accomodating, but their attitude improved when I showed up to support my neighbors -- the point being that some banking institutions are not very welcoming to rural or poor or less educated people, and therefore these people may be intimidated about using such institutions.

You might also look into "Condusef" -- this is the Mexican federal government's agency for consumer protection for things to do with financial institutions -- problems with banks, credit cards, etc. They are very proactive, and looking at their website might give you some insight into financial institution problems. (try a Google search for Condusef, and that should take you to their web page).
Good luck!

morgaine7

Mar 31, 2009, 11:40 AM

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Re: [tseeger] Trust of banks and money in Mexico

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My observations in La Paz, BCS are similar. Banks and ATMs are crowded mainly around paydays. Businesses that pay employees in cash (e.g., contractors) are also making withdrawals to meet their payrolls.

I opened dollar and peso checking accounts at Bancomer, initially to transfer funds to buy my house and mail checks for local payments before I moved here. I'll probably use the dollar account to receive US social security payments when they start in a few months; otherwise I'd probably close it, since I haven't used it for about two years. I access the peso account regularly to get cash via the bank's ATMs. My accounts are very basic and pay no interest, nor is there a service charge ... unless I go below minimum balances of $299 US and 1,999 MXN respectively. That's inconvenient for me and undoubtedly even more so for Mexicans who live from paycheck to paycheck.

At Bancomer I pay 33 pesos a month for limited online access, which I find convenient. For full access (to perform transactions online), it's substantially more expensive and used primarily by businesses.

Some businesses here accept checks in pesos, especially if the check is on the same bank they use. Examples in my experience are notaría, car insurance company, property manager, fideicomiso bank, contractor, a few major retail stores, though it's a hassle (lots of ID, approval by manager, etc.). Hardly anyone pays by check.

Credit cards aren't common, for reasons mentioned. Many people (including me) make larger purchases on the apartado system, which involves a down payment, periodic installments, and collecting the item when the last installment is paid. Most stores don't charge for this. For online purchases, some businesses accept credit cards, but many specify deposito bancario, which is a direct bank transfer to the vendor's account. This is arranged at the bank for a fee.

So yes, it's very much a cash society. I don't know that Mexicans distrust banks, but I'd suspect that many find them inconvenient (or expensive) to use and/or don't have sufficient cash flow to make it worthwhile.

Kate

esperanza

Mar 31, 2009, 12:11 PM

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Re: [tseeger] Trust of banks and money in Mexico

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All over Mexico I see a use of banking that I have never seen in another country. If a person wants to make, for example, a reservation in a small hotel that does not take credit or debit cards, the hotel simply gives its bank account number to the person making the reservations. The person then makes the deposit to the hotel's bank account, faxes the deposit slip to the hotel, and bingo: the reservation is confirmed. Many types of businesses work this way.

Occasionally I have been given a check in payment for something; most recently, a business paid me money owed using a check. Every time the check was made payable this way: Al Portador. That means "To the Bearer". Take the check to a branch of the bank that it's written on and it will be cashed immediately.

I also made specific check-cashing arrangements with a Mexican national casa de cambio in order to cash third-party checks. Once that casa de cambio had my identifying documents (passport, immigration documents, etc) on file, I could take any check into one of their offices and cash it.

In over 30 years and although I do have a Mexican checking account, I have never written a check for anything in Mexico. However, I know that Telmex (Teléfonos de México, the phone company) accepts checks in payment.

And yes, Bancomer still charges 30 pesos a month for online banking access.

http://www.mexicocooks.typepad.com

(This post was edited by esperanza on Mar 31, 2009, 12:12 PM)

La Isla

Mar 31, 2009, 3:28 PM

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Re: [esperanza] Trust of banks and money in Mexico

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keith

Mar 31, 2009, 9:42 PM

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Re: [La Isla] Trust of banks and money in Mexico

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The banking industry seems to be riding high in Mexico: there are always long lines in every bank and the attitude behind the counter is that customers are a dime a dozen.

sioux4noff

Mar 31, 2009, 10:07 PM

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Re: [esperanza] Trust of banks and money in Mexico

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And yes, Bancomer still charges 30 pesos a month for online banking access

Bancomer has a Preferred Customer account, at least here in the Puerto Vallarta area. With it you get free on-line banking, no fees, and best of all a nice gold card that allows you to go in a special, very short line at the bank.
http://www.bancomer.com.mx/pcu/index.html

morgaine7

Apr 1, 2009, 7:28 AM

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Re: [sioux4noff] Trust of banks and money in Mexico

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Yes, there's a preferred customer unit in La Paz as well. I've never looked into it, because I'd feel uncomfortable being singled out for preferential treatment simply because I'm a foreigner. I've been satisfied with Bancomer service as is for more than three years. Still, it's an interesting approach to new business. A couple of PCU reps have joined online discussions for English speakers to try to answer questions or quash rumors (for example, that Bancomer is doing away with dollar accounts). Since we're talking about trust, I'd venture that it's probably more of an issue among foreigners than it is among Mexicans, at least from what I've seen.

Kate

jerezano

Apr 1, 2009, 8:17 AM

Post #12 of 50 (5620 views)

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Re: [morgaine7] Trust of banks and money in Mexico

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Hello Ted et. al.,

"Excelsior" on-line reported today (NOT April Fools Day in Mexico) the outrageous interest rate on credit cards:>>>>>>>>>>>

Al presentar el informe de Agregados Monetarios y Actividad Financiera de febrero de 2009, el banco central informó que la tasa de interés promedio aplicada al crédito vía tarjeta de crédito fue de 41.78 por ciento. Este nivel no sólo representó un crecimiento de 0.15 puntos porcentuales con respecto al reportado durante enero, que se ubicó en 41.63 por ciento, además, significó un despunte contra el rédito de 34.27 por ciento que se cobraba en promedio en febrero de 2008.<<<<<<<<<<<<<

In a nutshell the gist is that the average credit card interest rate here in Mexico in February 2009 was 41.78%.

With an interest rate that high one can readily see why so many Credit Card users here in Mexico are now in a real bind.

jerezano.

sioux4noff

Apr 1, 2009, 8:25 AM

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Re: [morgaine7] Trust of banks and money in Mexico

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My total disdain for the Mexican banks in general over rode my reluctance to be "singled out for preferential treatment" for ANY reason. There are Mexicans with preferred customer accounts as well, who must be singled out for some other reason (maybe 'cause they have some money?).
Before the preferred customer thing, I had waited in line as long as 45 minutes at Bancomer. I think that is terrible - if there are consistantly long ines in the bank, which there are, hire more tellers!

I also use the shorter line to stop at the bank and drop off a friend's loan payment for hm, saving him loads of time, too.

esperanza

Apr 1, 2009, 8:26 AM

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Re: [morgaine7] Trust of banks and money in Mexico

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As far as I know, Bancomer offers preferencial accounts to any of its customers, not just to expatriates who speak English. Every Bancomer I've ever been in has three teller lines: one for customers who do not have Bancomer accounts, one for Bancomer account-holders, and one for 'Preferentes'.

Customers who do not have Bancomer accounts come in to make payments to Bancomer accounts that are not theirs, cash checks written on Bancomer accounts, as well as to transact other business.

The line for Bancomer account-holders is self-explanatory.

I'd like to know how to find the requirements for a Preferente account for Mexican citizens. I'll poke around on the normal (i.e., non-English-language) Bancomer website to see what I can find out.

http://www.mexicocooks.typepad.com

geri

Apr 1, 2009, 12:35 PM

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Re: [tseeger] Trust of banks and money in Mexico

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One reason I closed my Mexican bank account is that I found it impossible to change the address. My statements, for two years, went to my former address. Finally, I just let the money (maybe 30 pesos) dwindle away until they closed the account.

I filled out the appropriate forms, twice, but still couldn't change the address. So far, every place I've lived in Oaxaca, I have received bank statements, for years, for the former residents. I just threw them away. So, it's not just me.

Thanks for the replies explaining that businesses pay directly into an account. That explains why long lines at ATMs at certain times. I wondered why everyone decided to withdraw from ATMs on certain dates. I thought maybe a bank run. ja ja

This is an interesting thread. Esp. re credit cards. In Oaxaca, it's best, I think, NOT to use your credit card. Not only do you get charged 10 to 15% more (or another way, if you pay cash you can ask for a discount) but you run the risk of fraud. Sure, with some hassles, you can get the fraudalent charges removed, but why not pay cash....like the Mexicans?

Maybe this is just Oaxaca. OP, I think your project is very large in scope. Mexico is a big country with many different customs in various parts -- like other countries, i.e. USA and Canada. Customs vary from region to region.

Anonimo

Apr 1, 2009, 1:51 PM

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Re: [geri] Trust of banks and money in Mexico

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Geri, we had a similar problem in getting Banamex to send our monthly statements to our Correos apartado in Pátzcuaro. The Pátzcuaro Banamex just couldn't do it. We couldn't show proof that we resided at the post office! *@&!X??

They could send them to our rancho en el campo, where they'd arrive way late if at all. One reason was that they had the municipio wrong. (that may have been our error.)

Finally, we went to a more progressive branch of Banamex in Morelia, where in 15 or less minutes, they effected the change.

Saludos,
Anonimo

arbon

Apr 1, 2009, 2:06 PM

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Re: [keith] Trust of banks and money in Mexico

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The banking industry seems to be riding high in Mexico: there are always long lines in every bank and the attitude behind the counter is that customers are a dime a dozen.

In a Mexican bank, was the first place I saw a Mexican man not smiling, and he worked there.
~~~~~~~~~~~~~~~~~~~~~~~

Gringal

Apr 1, 2009, 2:25 PM

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Re: [Anonimo] Trust of banks and money in Mexico

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Trying to get a Mexican bank to send you statements is a daunting task. Our local Banamex branch required us to bring in everything, including a phone bill...which had to have the same address as the one we wanted the statements to go to. This, as it happened, was the physical address of our local mail drop. Anything that goes to our house gets tossed under the gate, if delivered at all. Can't put a box on the gate since it's a slider.

One leetle thing I could live without here. The general difficulties surrounding mail.

The good news: Most places will give you a nice discount on large purchases such as appliances if you use cash rather than a credit card.
The reason, it seems, is the time involved in the merchant getting paid.

geri

Apr 1, 2009, 2:31 PM

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Re: [Anonimo] Trust of banks and money in Mexico

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I don't know if Oaxaca has any "progressive" banks - yet! ja ja

I DO think it's interesting that in Mexico, even in Oaxaca, they've leap-frogged the checking account era and gone directly into electronic (i.e. ATMs) payments. Same with telephone/Internet. They've leap-frogged old telephone methods for more modern ways. I think, hope, same will happen with electricity. That the remote pueblos, where elec. is scarce, will go directly to solar/wind power. Even though, as I've been chastized on this forum, not all of Mexico is remote/rural burro paths, we may see some advantages in the future where these "burro path" areas will catch up, since they don't have to convert old infrastructure. They just leap-frog.

This is sort of "off topic." Forgive me. But I do think that "third world" countries (and rural Oaxaca is still third world) may have an advantage in not having to convert to "new" ways.

Maybe it's not "off topic." The OP is obviously researching from His/Her point of view, comparing US standards to Mexico. The world is in transition and those that are not "locked into" old way may transition easier. Could that apply to banking also? Dunno.

Merry Born

Apr 3, 2009, 3:27 PM

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Re: [Anonimo] Trust of banks and money in Mexico

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Anónimo, the Pátzcuaro Banamex sends statements to my PO box and has done so for years. I did not have any trouble getting them to do it.

I have had an account at Banamex for almost a decade. No problem at all, and they don´t charge for online access that I have ever noticed. I like Banamex. The Pátzcuaro branch for about a year has had a young woman as manager. For a long while, she was simply one of the employees. She´s sharp and the branch has improved since she took over. If they would just let us women run Mexico.

Briefly, a couple of years ago, I opened an account at Santander. After a month or so of waiting for a ATM card, I went in and cancelled the account. They still send statements monthly to my house with a minus-zero balance.

(This post was edited by Merry Born on Apr 3, 2009, 3:29 PM)

Anonimo

Apr 4, 2009, 4:47 AM

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Re: [Merry Born] Trust of banks and money in Mexico

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Hola, Merry (I'm surprised that we've never met.)

The reason, I think that the Pátzcuaro branch of Banamex couldn't change our mailing address was confusion on their part over where we actually lived. We changed domicilios 3 times in less than a year. Perhaps you had the same residence for a long time.

Anyway, it may depend who helps you. The lady bank manager has never dealt with us directly, just some grumpy older guy, who, for example, told me that there was absolutely nothing wrong with my ATM card. He showed me how to work it, holding it...just so... and withdrawing it very quickly. So, that works for me about 1 in 5 times, maybe.

I will grant that the lines for the tellers windows move quickly nowadays, sometimes so fast that I barely have time to get my passport and bank card out before my number is called. But I'm not complaining.

Saludos,
Anonimo

bammazmx

Apr 5, 2009, 7:48 PM

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Re: [jerezano] Trust of banks and money in Mexico

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They also pay some of the lowest interest rates on savings accounts

If you simply ask for a savings account,,,YES... But if you ask for a Fondo de deuda... basically a money market fund... they pay more than the northern banks. The rates were higher a year ago but right now I get almost 6%.

bammazmx

Apr 5, 2009, 7:56 PM

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Re: [morgaine7] Trust of banks and money in Mexico

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preferential treatment simply because I'm a foreigner

Prefered customer access has been around for many years... it is only recently that Bancomer started makeing all US or Canadian citizens Prefered customers. Any person that has an investment account ( money market, treasury bills, government bonds, stock market etc) even of a small amount becomes a prefered customer.

morgaine7

Apr 5, 2009, 9:11 PM

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Re: [bammazmx] Trust of banks and money in Mexico

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Yes, I realize that, and at least some working folks (Mexican and foreign) get Preferred Customer status because their salaries are direct-deposited. My only objection is to using nationality as a basis for awarding it to people (like myself) who don't otherwise qualify.

Kate

sioux4noff

Apr 5, 2009, 9:16 PM

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Re: [morgaine7] Trust of banks and money in Mexico

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Have I mentioned I detest going to the bank here in Mexico?
Frankly, I don't care if they gave me preferred customer status because I was wearing pink shorts, I'm just thrilled they gave me that gold card and I can minimize the time I spend at their fine bank.

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