MEXICO Trends and Developments Contributed by: José Ignacio Rivero, Bernardo Reyes Retana, Jacinto Ávalos and Mario de la Portilla, Pérez-Llorca
cable laws and to determine whether a specific licence is required in the context of their finan - cial services or products, in order to avoid legal exposure and risks. The granting of loans in Mexico is not a regu - lated activity; however, several other activities are regulated and not only require compliance with applicable statutes but may also require obtaining a banking or financial services licence beforehand. To operate within the Mexican financial system, fintechs typically rely on the following regulated or supervised entities. Aggregators and Acquirers (Agregadores y Adquirentes) These entities facilitate card payment process - ing without requiring a financial licence. How - ever, they must comply with registration and reporting obligations to ensure transparency and regulatory oversight. Money Remittance Companies (Transmisores de Dinero) These firms specialise in the transfer of funds domestically and internationally. They must be registered with the CNBV and adhere to strict anti-money laundering (AML) requirements, giv - en the high-risk nature of remittance services. Electronic Payment Entities (Instituciones de Fondos de Pago Electrónico – IFPEs) IFPEs are authorised to manage e-wallets and issue debit cards, allowing clients to store, trans - fer and redeem electronic funds. However, they are not permitted to grant loans. Incorporation of an IFPE requires (among others) CNBV authori - sation (with the favourable opinion of the Minis - try of Finance and the Mexican Central Bank), and involves a complex regulatory approval pro -
cess along with stringent capital and compliance obligations. Together with IFCs (see below), these are the two entities currently regulated by Mexico’s Fintech Law. Crowdfunding Entities (Instituciones de Financiamiento Colectivo – IFCs) These platforms facilitate (among others) col - lective, equity or debt financing through a crowfunding scheme. They must obtain CNBV authorisation (with the favourable opinion of the Ministry of Finance and the Mexican Central Bank). The complexity of the authorisation pro - cess and compliance obligations are equivalent to those of an IFPE. Popular Financial Companies (Sociedades Financieras Populares – SOFIPOs) SOFIPOs provide deposit-taking and lending services, subject to regulatory limitations based on their operational level. They require CNBV authorisation and have proven to be a popular alternative for fintechs seeking to offer banking- like services, given that they may take deposits from the general public. This last aspect makes them similar to banks, as deposit-taking has become somewhat of “crown jewel” that Mexi - can fintech companies seek in order to offer a bundle of services to their clients. For example, a company that may initially be in the lending business may seek to obtain a SOFIPO licence to be able to fund its loan origination through such deposits, while offering clients debit and related services. This allows for cheaper fund - ing, and at the same time provides fintechs with alternative revenue sources. Banks (Instituciones de Banca Múltiple) A full banking charter grants the broadest authorisation to offer financial services in Mex - ico, including (among others) deposit-taking, issuance of debit and credit cards, lending, and
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