According to Mexican regulators, the two companies in charge of the country’s credit and debit settlements represent “a near monopoly,” and big businesses need to sell shares in those companies, the Associated Press (AP) reported.
The regulators have recommended that the eight private banks which own large shares of the settlement and process firms sell them, as regulators stated they have an unfair advantage, according to the AP.
Because of the lack of competition, the federal Commission on Economic Competition stated the processing fees have gotten too high and incentives have been lowered for investing in new systems that could be safer for handling transactions and avoiding breakdowns. In addition, Mexican payment systems often break down and make it more difficult to use cards. Fraud is also highly typical because of this, the AP reported.
The high fees as well as bad service have kept customers and smaller businesses locked out of the card transaction system, the AP reported, and it often takes as long as four to six months to open a bank account there.
The Commission has stated there are also other issues, including lengthy and confusing methods for new firms seeking to get into the market. Because of that, the Commission has called on the Mexican government to ease restrictions for companies.
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