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During the last ten years, important technological changes within the Mexican government and the private sector have made it easier to electronically transmit and store information. On the other hand, this situation has resulted in an increase in unauthorized access to this private and secret information.
The number of electronic transactions including data transmission, money transfers, credit card charges and all types of electronic commercial transactions has increased substantially. However, the ability of firms and organizations to protect and maintain strict confidentiality for their transactions has developed at a slower pace. The increase in intellectual espionage and the presence and sophistication of international hackers are forcing users to install or upgrade their encryption systems. The use of encryption is considered essential for the banking and financing institutions. Such use has also been extended to the Internet, private and public research centers and large corporations. Many institutions that use strong encryption are planning to upgrade their systems. During 1997, most banking and financial institutions purchased stronger encryption systems.
Following the privatization of the national telephone company, TelMex in 1990, serious modernization has taken place. Large investments have been made to improve both fixed networks communication and cellular services. Since 1997, long-distance telecommunications has seen increased competition, due to further liberalization of the market (19).
In Mexico, the main end users of electronic commerce include banks and financial institutions, research centers, Internet users and industrial companies. In addition, universities and research centers represent a sector at the forefront of telecommunications and online databases. Most of these institutions are connected to the Internet and communicate with other academic and research institutions around the world. These non-profit institutions are attempting to extend their communications capabilities. Many offer access to their networks and servers through Internet.
Obstacles to Electronic Commerce
The main restriction in telecommunications is a limitation on foreign investment in telephone and value-added services to a 49% equity position. In cellular telephony, however, foreign investors may participate up to 100%. Nevertheless, foreign investor may only participate through a Mexican corporation (20).
Other obstacles include:
The approval of the Secretariat of the Treasury (Secretaria de Hacienda y Credito Publico) to permit the use of electronic invoices.
The passage of legislation to regulate the validation of documents and signatures contained in electronic transactions which will facilitate: 1) the establishment of intranet networks within large corporations in Mexico, 2) the increase of electronic trade, 3) an increase in the use of information exchange networks by firms, 4) the access of medium and small companies to networks, 5)the availability of new electronic banking and worldwide financing services, 6) the establishment of a Mexican standard (NOM) for encryption software.
Major Vendors
Some American firms already represented in the Mexican market are: IBM, Sun Microsystems, Data Fellows, Raptor, Kerberos, Sterling, Netscape, Checkpoint (21).
Revenues and Sales
The Mexican market for electronic commerce grew by 37% in 1997, reaching over US$5 billion. It is expected to grow by another 31% in 1998 and reach US$9 billion by 2001, an increase of 75% since last year. In addition, the number of Internet subscribers grew by 116% in 1997 from 1996, to over 400,000 and continues to climb (22).
The emerging markets in electronic commerce are the Banking and Financing Institutions. These include 55 Commercial banks (including domestic banks and foreign banks operating in Mexico) with approximately 5,106 bank offices, 63 Leasing companies, 49 Factoring companies, 40 Foreign exchange houses, 24 Warehouse companies, 18 Bonding companies, 33 Stock brokerage houses, 28 Limited-object companies operating as non-bank banks serving specific industrial sectors, regions or cities (23).
Last update: December 18, 1998.
