Raynor de Best
Content expert covering payments and (crypto)currencies
Digital payments in Latin America, by country - statistics & facts
Digital payments in Latin America have become increasingly prominent, as the region hopes to promote financial inclusion by improving digitalization. Indeed, forecasts on the number of cashless payments predict significant growth in countries like Brazil, Peru, or Colombia. Credit cards are not the main driver behind this. Instead, Latin America explores payment methods not found elsewhere else in the world. How, then, will payments look like in Latin America's key markets in about five years from now?
Latin America is currently involved in digital payment innovation, outpacing even the United States. Challenges remain, though. Getting enough people on board to abandon cash or credit cards could be a lingering question in Latin America's payments landscape, especially Mexico.
Credit cards on the decline
Like the United States, payment cards are popular in Latin American online shopping. The market share of payment cards - credit and debit cards both - is well above 50 percent in countries like Ecuador, Panama, and the Dominican Republic. Credit cards, specifically, account for more than a third of total e-commerce spending in 2023. Within four years, however, online credit card spending is forecast to decline substantially. This is because Visa and Mastercard face increasing competition from local processing rails in Latin America. One of the main competitors comes from Brazil, a country forecast to improve payment speed significantly between 2023 and 2028.Pix: Brazil's answer to cash
Brazil's Pix ranks one of the most used real-time, or instant, payment schemes in the world, and, for some, is synonymous with digital payments in Latin America. Developed by Brazil's central bank and launched in November 2020, the user count of Pix reached 100 million users within 12 months. Key to its success are its ease-of-use, its processing speed, and its availability to everyone, for free. Consequently, Pix digitalized transactions that before 2020 often occurred in cash. This way, the scheme helped to fight Brazil's unbanked population, inspiring other countries in the region to create their own variant of Pix.Alternative payment methods are on the rise outside of Brazil
By 2024, Latin America has several of such payment schemes that are developed by a central bank and allow for real-time payments. Examples of Latin America's main account-to-account, or A2A, brands include - besides Pix - Yape and Plin in Peru, PSE in Colombia, or Modo in Argentina. Additionally, companies explore future cross-border payments that will involve Pix in Argentina and Uruguay, Brazil's neighbors. The market share of A2A payments is therefore expected to keep growing across LATAM until 2027. The main exception, however, is Mexico. The role of cash in Mexico remained high compared to other countries in the region or the world, as its A2A brand - CoDi - did not attract users.Latin America is currently involved in digital payment innovation, outpacing even the United States. Challenges remain, though. Getting enough people on board to abandon cash or credit cards could be a lingering question in Latin America's payments landscape, especially Mexico.
