One of the biggest mistakes in conversations about economic development is that people talk about formalization as if it were mainly a legal or regulatory issue. It is not. Formalization starts much earlier and much closer to the ground. It starts at the moment a transaction happens and whether that transaction leaves behind a usable record. If payments, collections, purchases, and commercial relationships remain informal, fragmented, and hard to trace, then the sector remains informal in the ways that matter most, no matter how many policy discussions happen around it.
That is why digitizing transactions matters so much, not because it sounds modern and not because digital payments are somehow inherently better, but because they turn economic activity into something visible. They create structure where there was only movement, records where there was only trust, and data where there was only memory. Once that happens, an entire sector starts to become legible in a different way. This is especially important in industries where real business activity is constant but financial visibility is weak. In those sectors, the issue is rarely lack of effort, lack of demand, or lack of productive capacity. The issue is that too much of the economic value being created never becomes part of a formal, usable financial history. Transactions happen, but they do not build identity. Payments happen, but they do not strengthen access to capital. Commercial relationships exist, but they do not translate into financeable behavior. That is not a minor inefficiency. It is one of the biggest structural bottlenecks to growth.
Mexico is a very clear example of this. Informality is not some secondary feature of the economy. It is built into the productive base of the country. In 2024, the informal economy represented 25.4% of GDP, and within it, agriculture, livestock, forestry, fishing, and hunting represented 26.1% of informal value added. Even more telling, informal activity grew 4.3% in real terms in 2024, while formal activity grew just 0.5%. Those numbers make one thing obvious: informality is not a side problem. It is where a massive share of real economic life still happens, and that matters enormously for Mexican agribusiness.
Agribusiness in Mexico is strategic, dynamic, and economically relevant, but it still operates with too much opacity at the transactional level. That is the real problem. The sector moves billions of pesos every year, exports continue to grow, and the commercial opportunity is undeniable. But too many producers, distributors, and suppliers still operate with weak payment traceability, inconsistent records, informal collection practices, and limited financial visibility. In a sector where timing is everything, that is a serious constraint. Agriculture does not wait for administrative order. Inputs have to be purchased when the crop cycle demands them, logistics have to be paid before revenue is collected, and buyers often pay later while producers need liquidity now. Every delay has consequences, every lack of visibility creates friction, and every undocumented transaction weakens someone’s ability to plan, negotiate, or access capital. When people talk about digitizing transactions as if it were a nice operational improvement, they are missing the point, because in agribusiness it is not cosmetic but foundational.
The real value of digitizing a transaction is not the transaction itself, but the trail it creates. A digital payment is not just a payment, it is proof of economic behavior. It shows frequency, discipline, counterparties, timing, volume, seasonality, and reliability. Over time, those signals become far more valuable than most people realize because they start building something many businesses in Mexico still lack: a visible economic identity. Without that identity, the ceiling is very low. A producer may be completely real, productive, and commercially active, but if most of that activity is poorly documented, the financial system still treats that producer as opaque. A distributor may have years of operating history, but if collections are irregular and transactions are not traceable, underwriting remains guesswork. A supplier may know perfectly well which customers are trustworthy, but that knowledge stays trapped in personal relationships instead of becoming portable data. That is one of the hidden costs of informality: it does not just limit efficiency, it keeps credibility local, anecdotal, and difficult to scale.
This is why the conversation around digitization in productive sectors is still too shallow. Too often it gets framed as a payments issue, a fintech issue, or a convenience issue, when in reality it is much bigger than that. Digitizing transactions is one of the most direct ways to formalize economic behavior without starting from bureaucracy. It formalizes from the bottom up, through actual commercial activity, and that is far more powerful than trying to formalize a sector only through top-down requirements that do not change the way business is actually conducted day to day. Once transactions become digitized, the effects compound quickly. Businesses become easier to evaluate, risk becomes easier to price, collections become easier to reconcile, supplier relationships become easier to structure, and planning improves because transaction patterns stop being invisible. Most importantly, access to credit starts to make more sense, because financing is no longer being offered into a black box. It is being offered against behavior that can actually be seen.
That matters in Mexico, where access to financial products has expanded but usage inside productive activity is still uneven. Many people now have accounts, but an account alone does not formalize a business. What changes a business is when collections, payments, repayment behavior, and operating flows become traceable over time. That is when finance becomes smarter, and that is when credit starts being based on what a business actually does rather than only on what it can document on paper or pledge as collateral. For Mexican agribusiness, this could be a major unlock. It could mean producers building financial profiles based on real commercial behavior rather than incomplete paperwork. It could mean suppliers extending terms with more confidence because payment patterns are clearer. It could mean lenders underwriting against actual operating rhythms instead of static snapshots. It could mean moving away from cash-driven, reactive cycles and toward more predictable, repeatable, and scalable commercial systems.
That shift would not just make the sector look more modern, it would make it work better. A more digitized and more formal agribusiness sector would allocate capital better, coordinate supply better, and absorb shocks better. It would also be more inclusive because many businesses that are economically sound but financially invisible would finally begin to generate the records needed to access better financial tools. That is the part that matters most. Formalization is not only about compliance. At its best, it is about making productive actors more visible, more credible, and more capable of growing. The real question, then, is not whether digitizing transactions is worth doing, because that part is obvious. The real question is why so many sectors still treat transaction digitization as secondary when it is one of the clearest ways to improve financial access, reduce opacity, and strengthen economic coordination at the same time.
In the case of Mexican agribusiness, the opportunity is particularly clear. This is already a large and important sector. The demand exists, the activity exists, and the productive base exists. What is still missing in too many parts of the value chain is traceability. Without traceability, there is no real formalization; there is only economic activity that remains partially invisible to the systems that could help it grow. That is why formalization begins with the transaction, because once a transaction becomes visible, the business behind it becomes visible too, and once a business becomes visible, it becomes easier to trust, easier to finance, and much easier to scale.
