Credit Card in Mexico

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INTRODUCTION

In the world there are many ways to use the money, but one of them are cards both debit and credit are used worldwide and focus in México, here is a little introduction about what is one of this. Even though debit cards have become widely used, many people are unfamiliar with them. They look like credit cards, but function like cash or personal checks. When you use a debit card for a transaction, the money is quickly taken from the checking or savings account that the debit card is linked to. And for a credit card payment is a payment with money (credit money) that as all monetary aggregate different from M0 is not created by central banks but by private banks or shops that give credits. Therefore, the cash a collection with credit card depends on the creditworthiness of the issuer of the card company. That Credit money is not the person who owns the card, you have to pay.

CREDIT CARD

The bank credit cards came with other innovations in retail, banking such as check guarantee cards, personal loans, traveler’s checks and the first forms of Wire transfers. In fact, they appeared as continuation of a previous product, that was called card "Travel and entertainment" (or T & E for its acronym in English), which was the pioneer in the market. They started as a relatively specialized project. An important objective It was to find alternative ways to distribute services Financial Retail.

In the sixties, the credit card was a new product in Mexico and as already explained, relatively new internationally. The first credit card in the country, such as we know it today, came in 1953 and was Diners Club. Then came American Express and Carte Blanche. However, it was for a customer service reduced. The first bank credit card Mexico also identified each as the first in Latin America was launched to the market on 15 January 1968 by the National Bank of Mexico (Banamex), then one of the two largest private banks in Mexico.

The card was called Bancomatico and linked to the system Interbank - Master Charge. C:\Users\Usuario\Desktop\Sin título.png

A year later, Bancomer, his main rival and one of the largest banks in the country, issued his own card in June 1969 to having an affair the BankAmerica system. A few months later, in 1969, a group of banks issued in a third syndicated bank card in the Mexican market, Carnet.

This phenomenon took place in a context of high growth of the Mexican economy and coupled with a process of urbanization and growing middle class urbana.12 of these processes encouraged that in the sixties some banks initiated strategies cation services (Del Angel 2010 and 2011). One of that strategy was the introduction of the credit card. In those years the banking operation in Mexico was limited to organizations in the country and foreign competition was restricted. But all large and medium banks had established links with international banks, which facilitated communication regarding market developments. It also facilitated a process of innovation transfer. As precedents for the development of the card was exploratorias.13 visits testimony of a bank president he says of those years Banamex executives conducted several trips to the United States mainly from where they took the business models and card operation. In turn, the bank had begun in 1958 personal loans service, which gave him experience in this type of credit, based on (then very basic) parameters on individuals and corporate credit were different.

Credit limits were 5 thousand pesos minimum and maximum 50 thousand pesos and there was possibility of issuing additional cards on the same credit line. The rate of monthly interest rate was 1.5%. There also know it could have cash amounts up to 2,000 pesos, with commission 2%. To do this, initially (before expansion of ATMs), the cash withdrawals were made in the branches bank. The contact to make a request was made at branches. In the cities of Guadalajara and Monterrey, the two largest cities after Mexico City, the authorization procedure was in charge of the department of personal loans because they had experience in information verification and authorization of these lines. In the rest of the country, the branch sent documents directly to Mexico City. There is also the card they issued and sent the applicants branches. Banamex also distributing the card through its affiliated or associated banks. They were institutions of regional operation with which the bank maintained a strategic alliance. Later agreements with banks with which Banamex had no relationship, like the above intermediates was established with regional scope. This was a strategic positioning of the bank before the adoption of the card by the competition. But this creates some pressure on the branches of the regions where these banks were, as they felt they were doing competition with a product of the same company.

By closing 1968, Banamex had more than 46.365 6,378 cards in circulation and business Members who accept the card. From those businesses, 2,803 were in Mexico City and 3,575 in 93 other cities in the country. To achieve such distribution was essential wide regional coverage that had the bank across the country with its branch network. In 1969 already they are circulating more than 165 000 credit cards and more than 17,500 establishments had joined, in 1970 approximately 25 230 thousand cards.

Sustained growth trend, the Banamex card is an example of product acceptance and that it was a good deal for the bank. The expectation of recovery investment was seven years.

But nevertheless, it was recovered in the first two years. For operation of the card Bancomatico, Banamex implemented an own system. Credit card not only involved the use of new technology for the product itself. It also was an innovation that incorporated various services. This process was gradual, but steady. For example, in 1974, in addition to the Telephone Information Center was opened to handle inquiries from customers, the service called Bancomatico Protection, which limited to 625 pesos the user's responsibility in case of theft or loss of the card was introduced . Also that year, joined Banamex system using foreign affiliates to Interbank Card system, which then had 34 million users worldwide. In Mexico, the introduction of ATM automatic goes back to