Category Archives: Economics

October 4, 2019 · 6:57 am

What’s going on with you–(Pay)pal?

paypalimage.jpg

At the beginning of September, when I opened my Paypal account to count my pennies, there was a message about some changes that would be coming up on September 25. It seemed a kind of a random date and I didn’t really understand what was going on. I sent an email to Paypal customer service to ask for clarification. This is what I received in return:

PayPal is making some changes to its User Agreement that will be effective as to all Mexican PayPal users as of September 25, 2019. We encourage you to review this Policy Update and familiarize yourself with all the changes that are being made. 

Amendments to the User Agreement

 

  • We are disabling the use of balance and implementing an Automatic Transfer feature to your Designated Bank Account (currency conversion fees may apply).
  • We are modifying the currency conversion fees for sending payments. 
  • We are disabling the Mass Payment/Payouts feature.

 

So on the morning of September 25, I signed in and manually transferred most of my balance to my Capital One 360 bank account, just in case. I then held my breath and crossed my fingers. I checked in again and the wrong bank account was scheduled to receive the automatic balance transfer. So I changed that. And waited. Everything went fine.

The next day I discovered that I couldn’t use Paypal to pay for anything. Prior to these new changes, I could use my balance (which no longer existed) or withdraw funds from my Capital One 360 account for the purchase. Not happening anymore. 

Since I am paid for one of my jobs via Paypal, on Monday of the following week, money went in and then just sat there. It wasn’t automatically transferred. I couldn’t transfer it manually. So now what was going on? I sent another message to Paypal which went unanswered. In the morning, I called them up. 

There was “a usually high number of calls” (at 7 am) but a representative would be right with me. When I did talk to one, I explained my situation. The nice young lady said there was a glitch and the money wasn’t being transferred automatically like it should be. So she told me to go to www.paypal.com/wdfunds and I could transfer from there until this problem was fixed. I did and I could. I asked how long it would be until things were back on track. Maybe this weekend was her reply but not with any real conviction. 

So what’s going on in the banking world here in Mexico? It apparently has something to do with Fintechs and the LEY PARA REGULAR LAS INSTITUCIONES DE TECNOLOGÍA FINANCIERA instituted by former president Peña Nieto in March of 2018. The law is being pushed forward by current president AMLO and includes “electronic payment processors” like Paypal. 

It seems that AMLO has this idea that money laundering is going on through Paypal. With all money being routed directly to Mexican bank accounts, the government will have a better handle on remittances and of course be able to collect taxes on those funds. 

This isn’t the first move in complete governmental control of money in Mexico. In August, AMLO was pushing to make all tolls and gas payable through CoDi (Cobro Digital), a digital payment system controlled directly by the Bank of Mexico. This new method of payment went online just a few days ago.

There are a number of reasons why this move concerns me. In Mexico, only 2 out of 5 Mexicans even have bank accounts. Making gas and other items only available for purchase with a bank card means there will be a flurry of black market items bought, things bought by those who have the bank card who then turn around and sell it for a profit to those who don’t have a bank card. 

Then there’s the fact that in order to access your digital payment platform, you need internet access, something that isn’t reliable at all in Mexico, not even in the capital where CoDi will be enforced in less than a month even among the street cart vendors. 

And then there is the smartphone needed to scan the barcode to make the purchase. I don’t have a smartphone. My husband doesn’t have a smartphone. My son doesn’t have a smartphone. No one I know has a smartphone. Estimates show only 40% of the entire population of Mexico own smartphones. 

Still, another issue is the overall unreliability of banks and bank technology in Mexico. In August, Banorte, HSBC and Santander customers couldn’t use their cards to make purchases because of some glitch. In May, Monex Casa de Bolsa debunked with millions of dollars, never to be heard from again. In June, Mexico froze bank assets of suspected human traffickers (which in theory sounds good however how easily funds can be seized is astonishing).

So where does that leave us? A cashless society isn’t a feasible option for Mexico and yet it’s moving along at a train wreck waiting to happen pace. So my advice is “Buckle up, it’s going to be a bumpy ride!”

4 Comments

Filed under Economics, Uncategorized

Tagged as , , , ,

March 11, 2019 · 6:57 am

Continuing with the Internet Crusade

So all of a sudden during a Tuesday morning class, neither internet was actually providing internet service. I had to put in an emergency absence form for the second half of the shift. The satellite internet hadn’t been working since late afternoon on the day before, so I had gone into the class knowing I didn’t have the backup. Then the Blue Communications internet just sputtered and died.

Unraveling this mess took more than a week. Beginning with the satellite internet, our regular monthly payment day is the 26th of the month. We normally pay it a day or so beforehand, but this month one thing after another kept us from actually paying it until the 26th. When we called to see why it wasn’t working after our payment, it seems that the contract had been signed on the 24th even though it hadn’t been installed until the 26th. Thus, the company decided we were delinquent in our payment on the 25th of this month and shut down service. Whatever. We were now current and on the 27th, we had satellite internet again.

Now for the Blue Communications internet story….

After trying to log in to the company site, we received an error message stating our SIM card was not functioning. This internet service uses a modem that uses something like cell phone signals to provide us internet way out in La Yacata. So since this was a SIM card issue, we took the modem to the office in Moroleon. We explained what the problem was and they started shaking their heads. We would need to call the technical service number for assistance. They couldn’t do a thing. The installer did plug it in at the office and verified that it wasn’t working correctly, but that was all. We asked whether they had another modem in the office in case the one we had couldn’t be fixed. I was assured that they did. I should have asked them to show it to me though.

Anyway, we went home with our modem and had my son call technical support. He was to be our representative in this matter for several reasons. One is my husband hasn’t a clue on internet/computer related gadgets. Secondly, though I do, I have difficulty understanding Spanish over the phone. So our teenage son took up the gauntlet.

Tuesday afternoon, he was on the phone over an hour doing troubleshooting. You know, move the modem here, press this button, now log in and tell me what it says. Nothing, ok, now reset this and reconnect that and tell me what is happening. Anyway, after all that, the tech confirmed that there was something wrong with the SIM card. He assured us that a report would be filed and that within 1-2 days, it would be resolved.

On Wednesday, the internet was still not working. So my son called again. He spoke to another tech person who said that no report had ever been filed on Tuesday. He assured us that the issue would be resolved in 1-2 days.

On Thursday, he called again. This time we instructed my son to say that it either gets fixed or we cancel the service. After being referred to a manager and then referred to that person’s manager, the cancelation request was finalized. I’d receive an email in 1-2 days to confirm that our contract had been canceled.

Meanwhile, on Friday we went to the office in Moroleon. We requested a new modem and a new contract. Now they didn’t have a modem for us. Huh! Go figure. If we would come back in the afternoon, they should get delivery by then. Meanwhile, they had a 5 MBPS modem that they could rent us. The owner had gone to the U.S. and didn’t want to let the contract lapse.

I told them that I wasn’t interested in that modem. Our modem had 10 MBPS and while it wasn’t consistent, when it worked, it worked well.

We returned that afternoon. Nope, no modem. Try back on Monday. On Saturday, the internet was working as well as it ever did. Good for a time, then dropping, sometimes coming back, sometimes not. So my weekend classes were not a bust after all. Plus, since the satellite internet was working again, I could do the ol’ switcheroo in the event one internet lost its signal.

On Monday, my husband went to check to see if the modem had arrived. The lady in the office gave him a hard time about canceling the previous service and trying to set up another one. I don’t understand why. We have no contract with Blue Communications. It’s set up on a month-to-month plan. The modem we bought outright. However since that particular modem was tied to that particular month-to-month service, in order to get a new modem, we had to cancel the old one.

Anyway, she told my husband to try the rental 5 MBPS modem out and see how that worked. So he brought it home and I used it to teach. It worked about as well as the other one. Only I still didn’t want to “rent” the modem. What happened when the owner decided to come back to Mexico? We’d be out of a modem.

My son called the support line again. He said that the person he spoke with this time apologized for the problems we’d been having as well as for her co-workers who didn’t seem to be able to figure out what they were supposed to do to file a report. Of course, no report of the internet outage had been filed for our account, nor any cancelation request sent through. As long as we paid our monthly fee tomorrow, the service would continue uninterrupted.

So we went back to the office in Moroleon to return the modem. We requested the deposit for the new modem and monthly contract back. Of course, they didn’t have the money.  The lady suggested that she could apply the balance to our monthly fees, which would pay us 3 months and change in advance. Well, it’s not what I had planned for that money, but I guess it would do. She gave me a piece of paper with words to that effect. 

Despite all of our precautions, the last day of our monthly plan, our internet service was cut off.  We learned an interesting tidbit. Once your account has been deactivated, you can not access the customer service line by entering your account number. It’s like blocked or doesn’t recognize it or something. So since we couldn’t get ahold of anyone by phone, we went back to the office in town. They said that our payment had been made and gave us a receipt. When I asked whether someone could call and find out what was wrong with our account, the service technician told me to send them an email insisting our service be fixed.

Umm, if I don’t have internet at home, how would I send an EMAIL which requires the INTERNET? Go to the Cybercafe and wait there for a response? So that was completely useless advice in my opinion.  Anyway, since the backup satellite internet was still chugging along, I had my son log on to the company website and chat with a representative. She told us that there had been no report made for service repair but there was a cancellation request. Válgame dios! (Oh my god!) She asked if we would like to reactivate our account and the next day we were back in business. Well, as much as we ever were with this internet provider.

2 Comments

Filed under Economics, Employment, Teaching

Tagged as , , , ,

February 21, 2019 · 7:00 am

Taxes for Expats

Well, the end of January brought my 1099-Misc and that huge royalties check of $12, which apparently is declarable income. So it was time to look at my tax situation.

Normally, I use a free online tax site because, well, I don’t like to pay for things I don’t have to. However, 2018 was the first year that I was classified as an independent contractor rather than an off-site employee, by the online school that I work for. The company did this because as an independent contractor, they don’t have to pay taxes on me, nor provide any sort of benefits like they do a U.S. employee.

So what this meant for me, is that this year, instead of getting a refund, I would OWE money to the federal government. Most independent contractors make quarterly payments during the year to avoid the very situation I found myself in.

Regardless, here I was. So instead of doing the free online tax filing, I opted for Taxes for Expats (TFX). It has a promising name, don’t you think? Oh, and is a women-owned company.

taxes for expats small

The tax preparer assigned to me was Dean Becker, CPA. I completed an automated tax questionnaire, to begin with. It took a bit of time to fill out. TFX also offers a VIP service which will fill this out for you after you send your personal documents.

Then Mr. Becker sent me an engagement letter outlining what services TFX provides and my costs for those services. Turn-out time is typically 15 days from when TFX receives my signed engagement letter, so you still have plenty of time to get your taxes done.

Mr. Becker had a few questions for me about my tax situation. I changed my status to self-employed which allowed me to add home office deductions. He asked for an itemized list of my deductions, which I had, so that was no problem.

He also asked if I had anything like school records that proved my son lived with me to qualify for the child tax credit. Unfortunately, my son is enrolled at UVEG, which is an online preparatory, so there aren’t any records that would indicate he lived with me in La Yacata during 2018.

After my tax return was ready, I was able to review it. Sure enough, I OWE taxes for 2018. The money that I was credited for my 2017 taxes was deducted from the total amount. Once I approved it, TFX e-filed my return for me.    

Of course, I have to make arrangements to pay the taxes owed, but other than that, I’m finished for the year. My taxes situation was all that complex in comparison to some. So if you have other tax issues here’s what you need to know about Taxes for Expats (TFX).

They offer 3 types of services:

  • US FEDERAL TAX RETURN PREPARATION – They prepare single year returns and help delinquent non-filers become complaint with the IRS through amnesty programs. For customers who need to file more than 3 years at a time, there is a 20% discount.
  • STATE TAX RETURN – They prepare a state return if one is required.
  • CONSULTATION – They offer 3 levels of tax consultations, including a free intro consultation and high-level tax planning sessions.

TFX also assists American expatriates with:

  • Alternative minimum tax foreign tax credit
  • Due dates of tax returns and payments
  • Exchange rate conversions
  • Exemption and dependency allowances
  • Foreign earned income exclusion
  • Foreign tax credit
  • Non-resident alien married to U.S. citizen
  • Reporting depreciation
  • Reporting foreign financial accounts
  • Tax treaties with foreign countries
  • Totalization agreements
  • Tax treatment of
    • Contributions to foreign charitable organizations
    • Military personnel
    • Ministers serving abroad
    • Moving expenses
    • Social security pension
    • Students studying abroad
  • Transferring property to a foreign trust
  • Treatment of controlled foreign corporations
  • Treaty-based return position disclosure
  • W-9 vs. W-8BEN filing requirements
  • Withholding rules on global investors of U.S. securities

I can’t say that I know what all of these items are, but if any of them apply to you, TFX is more than capable of handling them.

So, if you have any doubt as to your tax situation as an expat living in Mexico, you should check out what Taxes for Expats has to offer.

***

disclosure

 

2 Comments

Filed under Economics

Tagged as , , , , , ,