With 131.7 million inhabitants in 2025, Mexico is Latin America’s second-largest economy and ranks among the top 15 global economies. Being part of the United States-Mexico-Canada (USMCA) agreement, Mexico benefits from proximity to the vast U.S. market. The country’s rapidly expanding middle class and strong connectivity make it a pivotal arena for businesses seeking substantial growth. Recognized as one of the most advanced developing nations, forecasts suggest that Mexico could become the world’s seventh-largest economy by 2050.
Despite its economic rise, Mexico remains a high-risk area for money laundering due to organized crime. The country’s AML market generated $66.1 million in 2024 and is expected to reach $159.1 million by 2030.
This highlights the crucial role of AML regulatory frameworks in Mexico. Financial entities and businesses in certain sectors continually face compliance challenges. These include accurately identifying the beneficial ownership and origins of their clients’ and shareholders’ funds, among other obligations.
Mexico’s fintech market is growing fast; there are 773 local fintech startups in 2024, up nearly 19% from 2022. When including international companies, the total number of fintech solutions approaches 1,000.
The Fintech Law offers guidance for fintech operations, enhancing clarity for both local and international ventures. This legislation includes provisions for electronic money institutions (EMIs) and sets forth regulations for electronic payments and KYC procedures, categorizing risk levels based on monthly transaction volumes.
The latest FATF assessment in 2023 on Mexico’s adherence to AML and counter-terrorist financing standards found Mexico compliant with 10 out of 40 FATF Recommendations and largely compliant with another 24.
A significant update to Mexico’s AML legislation came in 2019 with the Federal Law for the Prevention and Identification of Transactions with Illicit Funds. According to FATF guidelines, regulated entities are mostly barred from holding or creating anonymous accounts, except in cases designed to promote financial inclusion. For deposits in pesos not surpassing a certain limit in individual accounts, anonymity is allowed. Specific AML and KYC regulations also differ by industry and regulator.
Identity verification processes in Mexico have evolved, despite the absence of a mandate for independent verification. Typically, customers provide identification copies at account opening.
For customers with low transaction thresholds, straightforward due diligence is deemed sufficient. With 66 million Mexicans (51% of the population) still unbanked. Simplifying onboarding could drive financial inclusion. With only 4.1% of people using mobile money accounts, fintech has a vast opportunity to align its products with market needs. Mexican flag waving surrounded by palm trees.
Rapid economic development, FinTech growth, and increased regulatory scrutiny mean companies in Mexico’s financial industry need to adopt stringent KYC measures to succeed. We have compiled the most important information you need to know.
Know Your Customer (KYC) is a key practice within global anti-money laundering (AML) efforts, essential for verifying customer identities, conducting due diligence, and monitoring transactions. In Mexico, these practices address local and international financial threats and align with the FATF’s 40 recommendations. The goal is to prevent the financial system from being exploited for money laundering and terrorism financing.
Mexico’s financial landscape has been a target for laundering billions of dollars annually, with illicit proceeds stemming from drug trafficking, corruption, and other crimes. KYC combats these activities by:
Identity verification: Ensuring that customers are who they claim to be, thereby preventing the misuse of financial services.
Customer Due Diligence (CDD): Assessing and monitoring customer risk profiles to identify potential threats.
Transaction monitoring: Monitoring customer transactions to detect and report suspicious activity effectively.
A significant portion of Mexico’s population lacks access to basic financial services. KYC, especially through digital means (eKYC), is crucial in bridging this gap, enabling more individuals to participate in the financial system, thus fostering inclusive economic growth.
Mexico’s approach to AML and KYC compliance is multifaceted, involving several regulatory bodies:
Financial institutions: Supervised by the National Banking and Securities Commission (CNBV).
Designated Non-Financial Businesses and Professions (DNFBPs): Regulated by the Tax Administration Service (SAT).
Retirement fund managers: Oversight by the National Commission of the Retirement Savings System (CONSAR).
Insurance and bond institutions: Governed by the National Insurance and Bond Commission (CNSF).
The Federal Law for the Prevention and Identification of Transactions with Resources of Illicit Origin, enacted in 2012, forms the foundation of Mexico’s AML efforts. It identifies specific “vulnerable activities” and mandates KYC checks for transactions exceeding certain thresholds. Further regulations, such as the Fintech Law, extend these requirements to the digital finance sector and cryptocurrency exchanges.
Identity verification: Utilizing passports, driver’s licenses, or national ID cards along with proof of address.
Digital onboarding: Video KYC may be required for account openings, enhancing the authentication process.
CDD: Tailoring monitoring efforts based on assessed risk profiles.
Transaction monitoring: Identifying suspicious activities for further investigation.
Company information: Verification of tax ID, beneficial owners, and electronic signature details.
Documentation: Collecting proof of address, contact information, and company structure details.
CDD and transaction monitoring: Similar to individual requirements but adjusted for corporate contexts.
Mexicans traveling internationally use a passport, a machine-readable document designed to meet standards set by the International Civil Aviation Organization (ICAO). Up until 2021, the Mexican passport was a non-biometric form of identification. Today, both biometric and non-biometric versions circulate among the Mexican population.
Mexico is home to the world's largest Spanish-speaking population, with over 130 million people. But when you look at Mexican identification documents, you’ll find that they sometimes use two other languages. Some biometric passports have text in Spanish and English, and others may also feature French.
According to international guidelines, countries that officially speak English, French, or Spanish are supposed to use one of the other two languages for certain sections of their travel documents. It seems Mexico has chosen to use both.
G2 Risk Solutions offers a streamlined solution for businesses navigating Mexico’s complex KYC landscape. Our platform enables:
ID verification processes: Incorporating a variety of ID verification methods to ensure thorough customer vetting. This includes identity document verification and biometric identification methods.
Risk management: Advanced tools for screening against PEPs, sanctions lists, and conducting adverse media checks.
Customizable integration: Adaptable solutions that fit the specific compliance needs of any organization, regardless of size or sector.
By adopting G2 Risk Solutions' automated solutions, companies can meet regulatory requirements more efficiently while strengthening operational integrity and customer trust.