Low usage of transactional bank accounts in Mexico: those who can’t and those who won’t

Abstract

In Mexico, the share of adults that have a regulated transaction account is low, even when compared to other countries of similar income levels. Traditionally, this problem has been regarded as a phenomenon of «involuntary exclusion», in which excluded individuals wish to use this service but face a number of barriers, among which those related to costs are the most relevant. Thus, public policies have focused on reducing costs. On the other hand, little attention has been paid to individuals that seemingly have decided not to use these accounts. Even if they do not face significant barriers to access the accounts, they prefer using non-regulated transactional services, or make and receive payments in cash only and keep cash surpluses at home. In this paper the phenomenon of «self-exclusion» is analyzed. It concludes that cost barriers only partially explain exclusion in the context of transactional bank accounts. Such exclusion also reflects the prevalence of informal economic relationships, which reduces the value proposition of transactional bank accounts to end users.