Home Business-newBusiness 867 bank branches closed down and one million credit cards were canceled in Mexico during 2021 first quarter

867 bank branches closed down and one million credit cards were canceled in Mexico during 2021 first quarter

by Yucatan Times
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The pandemic accelerated digitization, smartphone transactions rise 26.5%: says the National Banking Commission.

MÉXICO CITY, (May 18, 2021).- From January to March 2021, in the aftermath of the economic crisis generated by the covid-19 pandemic, banks suffered the impact, reporting the closure of 867 branches in the country, and the loss of more than one million contracts of Credit cards. In contrast, digitization and the use of alternative means to cash showed significant progress.

According to data from the National Banking and Securities Commission (CNBV) The branches of the 50 operating banks in the country reported a decrease of 6.7 percent, maintaining 11,912 points of contact with customers, a figure lower than the 12,779 that they added in the first quarter of 2020.  

The reduction in bank availability increases the risk of financial exclusion since the goal of financial institutions is to reach all of the country’s municipalities in 2024. From 2019 to last March 2021, the advance in coverage has totaled 227, and according to the Association of Banks of Mexico (ABM) the bank coverage is 87.2 percent. However, the strategy is now focused on channels such as banking correspondents and mobile media.  

Regarding the contracting of credit cards, the CNBV numbers indicate a reduction of 1,013,064 cards that were canceled by customers, which left the bank with a total of 27,707,743 contracts, more than one million less than the 28,720,807 registered in the same period of 2020. 

The CNBV reported that 70 percent of credit cards in the country are issued by the seven banks with the largest presence in the country: BBVA México, Banorte, Citibanamex, Santander, HSBC, Scotiabank, and Inbursa. This trend is due to the fact that Mexican users chose to make less use of credit, make purchases with their own resources and save, according to the ABM. 

In contrast, the pandemic further accelerated the digitization of banks, placing digital and alternative means of payment to cash, even above the provisions in ATMs. 

During the first three months of the year, this trend is reflected in the increase in transactions through cell phones that resulted in 52 million 451 thousand 885, which added 11 million 8 thousand 885 transactions in the period, that is, an increase of 26.5 percent compared to the 41 million 442 thousand 531 reported in March of last year, according to the CNBV.   

The increase in digital transactions was reflected in the decrease in the use of ATMs to dispose of cash, which showed a reduction of 2 million 931 thousand 330 transactions, even though they continue to represent a high transactionality with 160 million 224 thousand 874 ATM visits at the end of March this year.  

Card transactions at point of sale terminals (POS) increased by 7 million 637 thousand 101, resulting in a total of more than 230 million, which also shows a change in payments to avoid cash.

Source: Milenio

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