[almot]

There is no such thing as the best Mexican bank. But there could be the best bank for this particular purpose, i.e. SSP payments, while you other banking needs might better be served by some other MX banks.

Here is what you can do (I didn't, no RT status yet). Open an account in the US bank that has a counterpart in MX. Ex., Citibank or Scotiabank. Then (probably) you should open an account in their MX counterpart. Then you can have SSP deposited in the US bank and withdraw in MX counterpart bank.

Scotia has zero foreign ATM withdrawal charge within Scotiabank network even if you don't have Scotia MX account (and their ATM are ubiquitous). Scotia ATM located in grocery stores are not owned by Scotiabank and will charge a few bucks. Don't remember about Citi ATM fees but unlikely they are as numerous as Scotia.

About "good exchange rate"... Banks have never been good at it. Large amounts are probably better handled with Transferwise or OFX to your MX account.

 

[almot]

I hear a lot about Schwab and would've got their Visa if I were in the US, which I'm not. Canadian market has a mere handful of credit cards with zero foreign transaction fee, all are from marginal players with terrible service, and none offer fee reimbursements from every ATM.

Visa typically have poorer exchange rates than Mastercard, still much better than a bank. But this is for purchases. If you use credit card to withdraw funds in Mexico from your US account, the bank rates will apply, if I understand correctly.

I know that people are using Mexican Citibanamex account to move SS payments from Citi US account without any transfer fees. Not too many Citi ATM in Mexican towns, but having Mexican account is convenient for online purchases where US credit cards often wouldn't work.

 

[almot]

There is a reason why many Mexicans distrust the banks.

I'm curious why.

Yes, main reason for having MX account is paying bills and other online purchases (ex, you could use Mexican Paypal for online purchases, it requires MX bank account).
Plus, branch withdrawals above the ATM limit.
Plus, moving SS from the US to MX account in pesos without transfer fees like City does.

 

[almot]

Credit cards do have exchange rate better than banks. CC issued by major US bank would charge 2.5% conversion fee, but most of them will also give you 1% cashback points, so you effectively pay 1.5% conversion fee. Even after those 1.5%, considering better exchange rate than a bank, you will likely break-even, compared to using cash transferred for free from the US to MX at the bank rate. Especially if you pay attention to ever-fluid MXN/USD rates and use MX or US credit card depending on the situation, like Lat19n said.

Now, if you find CC that pays 1.25 or 1.5% cashback on all purchases and/or waives 2.5% conversion fee, you are golden. Preferably Mastercard - better exchange rates than Visa. Shop around, there were some good suggestions here. Regardless whether it's Mastercard or Visa, avoid little-known players, customer service can be terrible.

 

[almot]

I guess we should track it for a few months ... There were observations - not by me, and Mastercard came on top. Maybe Visa are are trying to do their best a little better now.

Perks that a card gives are more important than differences in exchange rates from one card to another. Cashback, conversion fee, annual fee. And - customer service. It sucks when they freeze your US account for "suspicious activity" (read - using US card in Mexico), and you can't get anybody live on the phone for hours.

Edit-PS:
About HSBC bank account - not credit cards. I remember the warning on their website that foreign HSBC ATM could charge withdrawal fee, and they don't make any promises to reimburse it. This (almost) necessitates keeping HSBC MX account. A popular bank in Mexico, many ATMs.

 

[almot]

There you go: https://www.hsbc.ca/1/2/personal/banking/ways-to-bank/atm. Scroll down to (*) - "...including a fee by another HSBC entity operating ATMs outside Canada."

 

[almot]

... and here same info for foreign ATM withdrawals from HSBC USA accounts: https://www.us.hsbc.com/atm/ - see note #2.

I would understand if it was HSBC ATM in OXXO, not in Mexican HSBC bank lobby, but if OXXO qualifies as "HSBC entity", this is interesting

 

[almot]

It appears that same rules apply to foreign ATM withdrawals from HSBC US accounts, - see the link in my last post.

The rule is not specific to any foreign country. It just says that they may charge, if your account is in the US (or in Canada) and you withdraw from HSBC ATM elsewhere. This is not my "impression", but the warning I remembered from their website. As it turned out, my memory was correct. Hopefully I answered your questions.