Living in Mexico, I have not been able to use my Visa/MC at several establishments since it is issued from a foreign bank (outside of Mexico). Even Ticketmaster in Mexico won't accept cards from foreign banks.

As far as the cash discount, that is rampid in Mexico. It is usally 10% discount and I the reason being is that if it is charged they have no choice but to report the sale. But if it is by cash . . . well . . . who is the wiser and they save the 15% tax payment to the govt.