We’ve written about banking and dealing with banks. But there is one thing about doing business in Mexico (not necessarily just in the Yucatan) that deserves an article of its own: cheques! (that’s pronounced "chek-ays"). In the States, we write checks without thinking about it. In the States, we’ve had checks cashed that had the wrong date on them, where the number didn’t agree with the written amount… we’ve even had checks cashed that we forgot to sign! So when we started running into the Mexican way of dealing with checks, we were totally unprepared. In the interest of preparing our readers, therefore, we offer up this synopsis (or is it a rant?) of our hard-won lessons.
Checking accounts - Opening a checking account in a Mexican bank? Leave yourself at least two hours and bring a friend, a good book or your iPod. Opening a checking account, like many other things in Mexican banking, takes time and patience. If you don’t speak Spanish, this is one event for which you should persuade a friend or colleague who does speak Spanish to accompany you. Most banks do not have a lot of English-speaking employees, and there is too much at stake to let something go wrong.
You should be prepared with your passport and probably a few good copies (just to save time). You should also have your FM3 or FM2 visa, especially if you plan to open a business account. Be prepared to sit while the bank clerk opening your account makes multiple phone calls, some of which are surely about what she is planning to wear tonite. Be prepared to sign your name multiple times exactly the same way… try not to be self-conscious or mess up your own signature. Go ahead, we dare you not to! Make sure your signature matches the signature in your passport. You’re going to need that trusty signature to be true to form in the future, so don’t hesitate to practice in advance.
Checkbooks - Checkbooks are called chequeras. They are closely controlled here. You’ll get your first one when you open up the account, but it won’t have your name printed on it and not everyone will take those checks (similar to the situation in the States). But don’t expect the ones printed with your name to be sent to your home. Instead, they will be held at the bank for you to pick up. And unless you have signed a letter designating your friend or office assistant to specifically pick up a checkbook already at the bank, you have to go to the bank yourself to get them. You have to show your ID (passport) and you have to sign for the chequera.
If you pick up two or three chequeras at a time, be sure to use them in order. If you don’t (and we learned this the hard way), you cannot go back and use a chequera with lower numbers on it. That chequera has to be voided, by writing Cancelado (canceled) on each and every check in the book.
Before you write a single check from a new chequera, there is an important step you have to take that we just don’t do in the States: you have to call the bank and activate the chequera. The number to call is usually on the front of the book itself, or on the bank’s website. Of all the things that we can do on our company’s new bank’s website (HSBC), activating a chequera is not one of them. For that, we recently had to call the bank, provide our clave (which means "key" and is a unique number given to your account), our PIN number and talk to a representative. The representative asked us at least six security questions, and also wanted to know the range of check numbers in the chequera and if every check was in the book. If you write a check before activating the chequera, that check is no good and no bank will accept it, even if the payee doesn’t try to cash it until after you have activated the book. Somehow, the bank has spies and they knew that we recently wrote a check to someone and THEN called them to activate the chequera. Sure enough, that check was returned, along with a nice little charge of $150 pesos.
Writing checks - Even after five years here, we make a point of concentrating very carefully when we write checks. And still, we tend to make mistakes and have to void a lot of checks. Why? Because the slightest error will cause that check to be unusable. You cannot cross out anything on a check, whether or not you put your initials next to your correction. If you write something on the back of the check (such as your account number to deposit it, for instance), and then cross something out, that voids that check.
You must be careful to write the correct name of the person to whom the check is addressed. You must write everything in Spanish, of course. We have had checks rejected because the date was written in English (April instead of Abril, for example).
The amount of the check must be written out correctly, and if you spell a number like dieciseis (16) wrong, the check will be returned. You must write "pesos" after the written-out number or the check will be returned. You must write the number of centavos (cents) and then follow that with M.N. (Moneda Nacional), even though every check we’ve seen had "Moneda Nacional" printed on it below that line.
Then you must sign your name the same way every time. And that signature has to look the same as the one on your passport and registered with the bank. If you wrote out your middle name on your passport, then you have to do the same when you sign up for your checking account. And every time you write a check, you must sign your name exactly the same way. We can’t tell you how many times we’ve had checks returned because someone didn’t like the signature. Every time we write a check now, the suspense builds… will we do it right? Did we hesitate too long? Dot the "i" in the wrong place? Check-writing brings on a bad case of performance anxiety these days.
Tricky Amounts - Want to write a check for over $100,000 pesos (not unusual if you are building a house). At our personal bank (Inbursa), we cannot write a check over that amount unless we clear it through the central bank. Actually, they call it proteción. After we write the check and before it can be cashed, we must call the 800 number of the central bank and request proteción for that check. After asking six to ten questions to confirm our identity (including what type of account we have, who the beneficiaries are, etc.), we are asked for the name of the payee, the amount and the check number. Since the conversation is undoubtedly taped, they repeat this information about three or four times to make sure they have it right. Then they pass you on to a supervisor, who CONFIRMS the information in Spanish spoken so rapidly that it makes our head swim. All we can do is say “si” a lot and hope she’s right. With our last bank manager, the payee (our architect, usually), had to also go to the manager and sit there while he called us to confirm that we did indeed mean to write a check for this amount to this obviously nefarious, middle-class mother of two. After all that, he would then finally allow her to cash the check. He has since been replaced by a more amenable guy who has not made la arquitecta go through that extra step. Also, since we’re on the subject, you cannot write an al portador check for more than $100,000 pesos. Or is it $150,000? We forget. We only write checks like that after long enough intervals of time to have totally forgotten that we can’t do it. Naturally, they are returned.
Accepting checks or cashing checks - Likewise, when you accept a check as payment, be careful that all these same rules are followed by the person writing you a check. Unless you need a check written in your name for a specific purpose (usually tax-related), most times people will simply write a check to Al Portador (to the bearer). An al portador check can only be cashed at the bank which has the account. Checks written to your name can be cashed at your own bank (if it is written on a check from another bank) only if you have enough cash in your account to cover it. Checks written to your name can be deposited to your account, however.
Sometimes, people would rather just deposit what they owe you into your account. This works well for people that live in a different part of Mexico. And it also works well for people who want to save money. Most banks charge a service fee of about $1 USD per check, in addition to a monthly checking service fee. We have heard that the government has recently decreed that no-cost checking accounts have to be made available to low-income clients, but we have not seen evidence of these yet.
USD checks - Have a check from the United States written to you and need to deposit it here? Imagine the reverse. Imagine that you have a check from Mexico that you want to deposit in a US Bank. Not going to happen. Well, here in Mexico, some banks actually allow you to open and maintain US dollar checking acounts. Those accounts easily accept other Mexican checks written in US dollars. But a check from the US written in dollars? That could take up to three weeks for approval. Frankly, we think it’s a miracle it happens at all. Our one experience with a dollar checking account is that they are expensive and in the end, for us, not worth it. Many people apparently have dollar accounts (even Mexicans) because they don’t want all their money in pesos. That’s a legitimate choice, but not for a checking account. We’ve since closed ours.
Bouncing Checks - Try not to go there. Try very hard. A bounced check (called cheque de hule, or rubber check) in Mexico not only costs a lot of money (sometimes as much as $100 USD) but it can also cause more problems than a bounced check in the States. We bounced a check once, early in our residence here in Mexico, written to a major store (Office Depot). In addition to covering the cost of the check and the hefty penalty, we were advised to pay $1,500 pesos to "clear our credit" with that particular vendor. We decided to do that and paid the $1,500 pesos. We have still never been able to use a check at Office Depot in the last four years.
Statements and Balances - Your account statement will be sent to the address on the checking account. Want to change your address? You must go to the bank yourself and bring a comprabante (a utility bill - JAPAY, CFE or Telmex - sent to you at your new address with your name on it). You can’t send someone to do this unless he or she has a signed letter from you. Want to consult your balance before you write a check? You can use the Internet, if you have your passkey. The passkey is a plastic gizmo that usually comes on a keychain and is sent to you at your address. It calculates a unique code every time you press the button (they all work a little differently), and you need that code, your password and your logon to get into your account. With one of our banks, you also need a clave (key), which has to be changed about every three months. Don’t use a computer and want to check your balance at the bank? You’ll have to stand in a special line to do that, because bank tellers don’t know your balance and cannot check it.
Closing A Checking Account - We recently tried to close an account and this particular account was a business account and had two debit cards associated with it. We spent over two hours at the bank but were unsuccessful. Honestly. No one in the bank could agree what the balance was. We went to multiple windows, talked to multiple people and in the end, we gave up. We wrote a check the next day for what WE thought was in the account, and received our money. Whatever money is still left in the account will be eaten up within a month by service charges. We hear that if there is no account activity for six months, that the bank closes the account automatically. We’ve decided to test the theory rather than spend more of our precious time at the bank.
Security - As you might have deduced by now, Mexican banks are completely over the top when it comes to securing your account. Perhaps there have been more cases of bank fraud in Mexico than in the United States. Of course, we’ve seen no evidence of that. We think it would be very difficult to work your way around the measures banks in Mexico take to secure your money. In other words, the wheels of finance grind slowly here. The basic rule of thumb in Mexico is, if you don’t need to use a check to pay for something, don’t do it! It costs more money than it should, and the process itself is fraught with frustration.
In Summary - You might find these measures bothersome at times (heaven knows, we have!) but when Working Gringa’s purse went missing recently, the fact that our chequera was inside didn’t bother us one bit. We can barely make our own checks work, so you can imagine how hard it would be for someone else!
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Thank you for this rant! OMG- writing checks here and trying to return something are my two top of the list, frustrating experiences in Mexico. Of course my favorite rule is that as a corporation, if you want a factura and the bill is over $2000 pesos the law says you have to write a check! Our Costco card is through our Hotel and we never get out of there for less than $2000 pesos. And Costco is one of the easier places to write a check. It only holds us up about 10 - 15 minutes. Sam’s club on the other hand is the worst. They will usually call the hotel and interrogate one of our employees.
By the way when we opened up our HSBC business account we were told we had to pay for life insurance for 6 months. HUH? It would be conveniently deducted. I put up a fuss but she was persistent. I did manage to get out of it with help from a higher source.
This was a very entertaining and therapeutic article! Next time I misspell veinte I will have a good laugh!
Well, I would be sunk. I understand the security part, but what about ATM cards on accounts. I have become addicted to using mine, and rarely write a check, anymore.
I know that many of the hotels, etc., want money wired to them, rather than having them secured to a credit card, good luck on trying that in the United States, because of the fees, perhaps, but good God. My hand writing has become so terrible that I can’t read it most of the time, much less in Spanish.
My husband would have a stroke over something this complicated.
Perhaps, Panama, with its’ easier banking system, and U. S. banks, would be easier, as keeping a lot of cash, in order to pay this stuff, or writing a check sounds as though it is easier to stand along one of the stone walls of the colonial homes and bash one’s head.
Brenda,
Most of us who write checks in Mexico must do so because we’re in business for ourselves. As Emily mentioned, there’s a law in Mexico that businesses that want to deduct an expense over $2,000 pesos for tax purposes have to document the transaction by writing a check.
The majority of retired or part-time residents (not to mention Mexicans in general) stick with cash. Once you set up a bank account in Mexico, an ATM debit card works the same here as in the U.S., as do over-the-counter bank withdrawals, so there’s no problem retrieving your money when you need it. But the moral of the story is avoid checks when you can.
We once bought a parcel of land here and the sellers wanted all $500,000 pesos in cash. What we wonder is, where do they keep it? Most Yucatecos sleep in hammocks, so it can’t be in their mattress…
I’ve read — and planned to check it out later this month when we’re in Merida, that you can have an account with the Inter National Bank (of McAllen & El Paso TX) and transfer USD funds without charge (except currency conversion, I imagine) to one’s peso account with Banorte. Inter National is owned by Banorte. Receive US check? Have them deposited with the Texas bank. Go on the web and transfer funds as needed in pesos to the online account with Banorte.
HSBC is supposed to be the local international bank, or whatever it’s saying is, but I gather HSBC in one country has no idea what accounts are in HSBC in another country.
I have no knowledge of Citibank ops in Mexico, but gather that there is no free transfer from a Citi US accont to a Citibank/Banamex account.
Had to do some spade work in the Citibank website… here’s a current url for their lowcost ($5!) funds transfer between a Citibank U.S. account and a Banamex account: Citibank Global Transfers
A 2003 Citibank press release stated that they charge a 2% commission over a supposed wholesale bank rate for currency conversion.
Other banks said to have some sort of US-Mexico hookup are Bank of America, Wells Fargo, and U.S. Bank. Sort of hard to beat the convenience of Citibank’s Banamex, or Banorte.
Forgot to mention — really appreciated the details on check writing in Mexico. Now I know why my Mexican wife never had a checking account!
What about writing checks with a typing machine? I used to work for a real estate firm in Puebla and we would write all checks with a typing machine and just have the director sign them… never once got a check returned.
When I was in Mexico I was so poor that opening a checking account was not in my mind. 40 years later, now living in gringolandia, my financial status improved. I am still poor, a working poor, but with a checking account and debit card that I use instead of cash. I am glad I was poor in Mexico and I didn’t have to use a bank! Oh God thank you for made me poor!
Well, I lied a little! I was poor but I opened twice a Checking account. I did have some of the problems you mention, like having to be careful with my signature, but in general it was easy to open that account. Perhaps it helps that my skin’s color is cafe con leche, my spanish is perfecto, my irresistible smile…who knows. Years later I had to cancel another checking account in Mexico while living in the States. My mother went to the bank, explained what her handsome son wanted to do, she was given a postal card size form to be mailed to me, and when I sent it back my account was closed.
Perhaps is easier for a Mexican to deal with another Mexican, and the employees in the bank feel they need to look more professional when dealing with a foreigner. But in general, I agree with you that the experience of having a banking account is a breeze in the States, and a pain in the neck… the lower rearside neck… in Mexico. If you are used to deal with a bank in America and then you deal with one in Mexico, you will feel and suffer the different styles and practices. For me it was easy because I knew only one kind of banks, and I was used to their practices.
Did I mentioned that having an irresistible smile helps!
We used to a bank account here (when we were buying our house and remodeling it), but decided that the hassles just didn’t make it worthwhile. We waited over an hour to change our address, brought passport, FM3 and comprobantes. The bank said that they needed the original contract, and asked us to return home and get it, and then wait in line again etc ! My husband asked if he needed that contract to close the account? they said yes, so he told them in that case I want to withdraw everything but one peso. Somehow, they figured out that they could print a copy of the contract and that would be okay. We were very happy when we closed the account.
Withdrawing money always took at least a half hour. Mostly because we had the funds in an “inversion” (like a money market account) since savings accounts don’t pay interest here! My husband says that he wishes he had a photo of my face when I realized that! I asked how much interest will we recieve, and they answered “none”, so I assumed that I was not asking correctly. I think I asked in 3 different ways, until I understood, I just couldn’t wrap my brain around the concept.
Theresa
Thanks working Gringa. The picture of hiding it in their hammocks gave me a good chuckle.
After I read the original article and commented on it, I began to think about all the changes we have had in our lives over the years, and how I managed to adjust to all of them, and this would just be one more adjustment, and I think I could make it.
My husband, however, would have to have me do it for him. He just doesn’t handle stress over doing financial things very well, and if there is any kind of conflict in things, or if things have to be verified or sorted out, it is up to me.
As long as I can have my ATM, I shall be okay. Aren’t we awful, in that we have become so dependent upon technology and doing everything easily, etc. We do, however, plan to put a safe in our home, when we relocate to Mexico, so we can keep a certain amount of cash on hand for emergencies. We got one of those for us here in the U. S., after Katrina, and due to our dear Homeland Insecurity Department.
I am glad to hear that one can do tranfers, according to one of the posters, from a U. S. Bank to certain Mexican banks now, as I have some automatic deposits which have to go into U. S. banks.
Thanks again. Your posts supply me with immeasureable laughs and insight.
An addition…it is, in fact, possible to cash checks written on a US bank account here in Mexico. In Merida, in the half-abandoned VIPs plaza across the street from Wal-Mart on the Paseo de Montejo, there is a currency exchange place that will also cash your American checks, with no wait. No kidding.
Walk into the tiny air-conditioned booth in the middle of the inner courtyard of the building, and present your check. You will be asked for the contact information for the person who wrote you the check, and the cost for the long distance phone call will be passed on to you. You will also be asked for some local references, identification, a copy of your deed, a blood test, etc. The first time we went here, we were given our money (not a small amount…about $3k US) on the spot. The second time, with a similarly sized check, the exchange place gave us a check for the full amount, in pesos, made out to us, which we had to take to THEIR bank to cash. A hassle, sure, but hey…same day check cashing, with no service fee apart from the exchange rate.
Remember, this is not a standard service provided by all exchange houses…just this particular one. For some reason.
Wow! Banking is complicated in Mexico. When WalMart gave me $13,000.00 usd profit sharing, I opened an account with Chase Manhatten in Fort Worth. Only using my Banking / ATM and Chase credit card in Merida. When Social Security gave me $4,000.00 lump sum for disability, I added that to my Bank account in Texas. Never worried about checks. Still don’t, now I’m back in Texas. I use a debit card for purchases. Working Yucateca has 2 banks. Her primary bank is Banamex. She has a secondary or smaller account with Banca Azteca. Guess that works well for her banking needs. I’ve never seen Ariadna write checks. Thanks Working Gringos on the Checks info.
Also…(and feel free to kill this comment)…you may want to take your routing and account numbers out of that image of the check, no?
Thanks, Malcolm… but that checking account is closed, kaput, out of order… no sirve!
With a Bank of America account in the US, you can designate up to 3 beneficiaries and send funds to them in amounts up to $1500 per transaction but there is a limit of $3000 per month. Best of all, there are NO FEES for either party.and they can pick up the money at a local bank in the city. We found this to be a good way to supplement ATMs and regular checking accounts when needing to access money in Merida.
The interesting thing about these stories of Mexican bureaucracy is this. Do the organizations involved (in this case the banks) ever do any kind of cost/benefit analysis of what it is they are doing? Even if they don’t care about you, the customer, surely they care about their own profits. It must cost Mexican banks a fortune to process checks, probably far more than they’d lose in the occasional fraud loss by being a little less over-the-top stringent. And it must cost them a fortune to have all those people working in branches handling and re-handling all these trivial “verifications.”
If it applied the same level of scrutiny, the U.S. banking system would grind to a loss-making halt. Thank god we have efficiency.
Long, long ago, and far, far away, I worked as a bank teller in a branch. This was in the days before digitized signature cards, and duplicate signature cards in the main office downtown where they paid checks. Once in a while, our branch would be asked to verify a signature on a check that had been presented downtown from another bank. Well, those checks were never less than $10,000 USD, and that was more than 25 years ago, so $10,000 USD was worth a fair bit more than it is now. Any check for less than $10,000 simply went through, whether it had the right signature or not.
I wonder when Mexican banks will figure out that its their own money they are wasting. It seems like there would be mountains of profit to unleash when they get this right. Maybe that’s why Mexican interest rates are so high.
Thanks for the grim update. I’ll remember to never open a checking account in Mexico.
Regards,
Kim G
Boston, MA
Saludos de Xalapa,
I have been banking and investing here with HSBC for a year and a half. I have written four different checks to friends for from $10,000. to $300,000. pesos and have been called twice by my bank to confirm the validity of the check.
Opening an account and changing my address has convinced me that HSBC is heavy on the paper. Everything takes a bit longer than this gringo is used to, but I have been very happy with the HSBC service.
Most of the economy of Mexico is not done through the banking system. Indeed, as you say, it would never get anywhere. It’s done face-to-face, in cash. Payrolls paid out, literally sometimes in rolls of cash. Mexico recently introduced plastic $20 and $50 peso notes, because the paper ones didn’t hold up well to being stapled together and paperclipped together for pay day distribution.
There’s something nice about having a bank actually care if you really sign your checks, if you ask me. In my line of work, we recently toured a “drop-box business” in the US. These are companies that another company would contract with to deposit customer payments. All night long, big trays of envelopes come in - truckload after truckload. American Express, the city water department, Visa bills from various banks, the cable bill, etc. All are organized by Post Office Box, so they arrive together.
Then it’s all fed into incredible machines that Read the Checks INSIDE the envelopes, and the account numbers on the payment slips. It is all photographed and processed through your bank at hundreds of feet per second, envelope after flying envelope. Only at the end are the envelopes mechanically opened and the checks separated from all else.
And what about mistakes? No matter! No, it makes no difference WHO the check is actually made out to, what the date on the check is, whether you really signed it or not. Send a $900 American Express payment to the city water department by mistake? Not a problem! You now have an $850 credit on your water bill. Of course, American Express isn’t paid, but that’s your fault, right?
I actually questioned this - seeing as how it appears to violate the Uniform Commericial Code which rules all banking transactions. No matter! They do it anyway. You folks can sort it all out at home, on your own. And now, paper checks no longer have to move between banks to be “processed.” The drop-box company’s say-so is the last word. The check has been photographed, cashed and it’s over. Only an image will reach your bank. And you’ll have to pay them a nice tidy fee to get a copy of it.
I only bring up this dry dull tale to say, somethings aren’t all as bad as they seem about Mexico. Everyplace has its problems, only of a different nature. So, wherever you are, count your blessings! If all is well, at least you haven’t paid the water bill for the next four years running!
I opened an account with Santander six months after moving to San Carlos, Sonora, and write monthly checks to our landlord. Only one came back, because I had forgotten I needed to sign with my middle name. I had to write one for propane once, and the poor driver had to come back three times and ask me to write another one! I misspelled numbers in every case, and he couldn’t spell well enough to catch it. But the bank kept sending them back. Whenever possible I try to use my ATM card and have enough cash for emergencies. But my next door neighbors tell me if I use an ATM machine in a convenience store, for instance, a hacker could fleece my account. They had it happen to them and a friend of theirs was robbed of $7,000. Only the ATMs at my own bank are really safe, they advised. By the way, Santander allowed me to open the account without an FM-3,while HSBC, which was my first choice, said I had to have one. But I’m glad I went to Santander because the manager speaks English.
Recently, I’ve managed to open a bank account with Bancomer (Playa Del Carmen) and have to say it was the easiest and most rewarding experience with any financial institution so far. I still live in Canada and have been able to transfer funds to Bancomer without any problems. Writing and issuing cheques is also fairly simple process. Bancomer now has a unit called “Banking and Investments - Proffered Customer Unit” and the service is simply outstanding.
Jacek,
were you able to open the account without an FM-3?
Yes, that is correct - no FM3. The only thing I needed was a permanent address in Quintana Roo. Once again, service is superior to the one I received in other parts of the world (personal experience).
Jacek
I couldn’t believe it when I stumbled on this rant….I have experienced every single problem you wrote about….every one….including writing a check Al Portador for 60,000 pesos only to discover the limit is 50,000 pesos…
I also had one snafu that you apparently did not have…if, when you tear the check out of the little book, you accidentally miss part of that blue or red stripe, the check will also not be processed by the bank. Every time I write a check it is a huge irritation just tearing it out as they stapled the book together in such a way it is almost impossible to get the check torn at the perforation.
Thank you for writing all of this down…I will be sending the link to every friend who is thinking about opening a Mexican bank account.
Great information. I had forgotten the “fun” of writing checks in Merida. I basically use my ATM or debit card all the time. I am looking at using Citibank in the states to receive my Social Security and retirement checks use Banamex in Merida. Any comments or suggestions.
Hard not to smile a lot reading this article…. I have so many “anulado” checks for each one I write….. what can I say… “Bienvenido a Mexico”
As a small business in Mexico, do you purchase your business cheques from the bank? And can you purchase computer cheques to work with your accounting software?
As a small business, yes, you get your checks from the bank. They are carefully controlled and not just sent to your home/office the way we are used to. You have to go pick them up yourself, or send a designated representative who has a special form filled out and signed in triplicate.
We don’t think anyone except companies as big as Telmex do computer checks around here. We have an accountant, not accounting software. Because accounting is different here… You don’t send invoices, you send facturas. They are numbered invoices in triplicate. Your checks can only go to pay for something for which you have a factura. It can get complicated… and its best to have an accountant. Perhaps if we were more comfortable with business Spanish, we could navigate these waters better on our own. In the meantime, we have an accountant… did we mention that?