The emerging dominance of digital payments in the LATAM payment landscape

Statistics from the Bank for International Settlements and research firms confirm the rapid growth of digital payments in the LATAM region. The COVID-19 pandemic has been a catalyst for change in Latin America’s payment landscape. The volume of contactless payments grew 45% between 2020 and 2021, reaching US$2.5 trillion. E-commerce payment volume is projected to grow more than 55% from 2021 to 2026.

LaFinteca is leading the shift from cash to digital alternatives. In a world where innovation is key, LaFinteca is becoming a catalyst for companies looking to navigate the complex landscape of Latin America.

Here are highlights of online payment trends and methods in Latin America:

1. Regional trends

   • Credit cards were the dominant payment method in 2021, accounting for 33% of B2C e-commerce sales. International credit cards accounted for another 25%.
   • Alternative payment methods such as bank transfers, digital wallets and debit cards are growing, with bank transfers growing at 107% in 2021. Mobile commerce is also popular, accounting for 60% of e-commerce volume.
   • Contactless mobile payments are lagging behind globally. In 2021, mobile shopping accounted for 60% of total e-commerce volume in Latin America, up 46% from 2020. In 2021, 21% of smartphone users in Brazil and 14% in Mexico used mobile payments in stores, compared to 87% in China.
   • Digital-only banks have grown at a rate of 27% since 2012, reaching 52% in Latin America in 2021. In 2021, mobile shopping accounted for 60% of total e-commerce in Latin America, up 46% from 2020.

2. Brazil

   • In 2021, 59% of online sales were paid for with credit cards, often using installment payments. Debit cards accounted for just 6% of sales.
   • In Brazil, the PIX instant payment system is gaining popularity. In 2021, 36% of mobile shoppers used it, and 40% of online purchases made by registered PIX users were made using it.
   • Mobile wallet transactions are projected to grow 41% per year to reach $146 billion in 2025.

3. Mexico

   • International credit cards accounted for the largest volume of online payments in 2021, at $17 billion. Debit cards account for 30% of online card payments.
   • Alternative services such as digital bank cards and “Buy Now, Pay Later” are emerging, with BNPL’s share projected to double to 4% by 2025.
   • Mobile fraud accounted for 33% of merchant fraud losses in 2021, up 10% from 2019.
   • In Mexico, 36% of users used digital bank cards and 36% used debit cards during the 2021 Hot Sale. Shoppers making cross-border purchases were most likely to use PayPal (48%).

4. Argentina

   • Credit cards (31%) and digital wallets (30%) were the main online payment methods in 2021. Debit cards accounted for 26% of sales.
   • 63% of sales on merchant websites in 2021 were paid with credit cards through a payment platform.
   • In Argentina in 2021, 83% of users used cards versus 81% used cash, showing a reversal of the previous trend. At the end of 2021, the number of QR payment transactions increased by 13%.

5. Chile

   • In 2021, credit cards were used for 38% of online purchases, while debit cards were used 20% of the time.
   • Digital wallets grew 42%, but 40% of shoppers still use offline vouchers such as ServiPag.
   • In 2021, 37% of online sales were paid for with credit cards and 25% with debit cards. The growth of digital wallets was 60%.
   • P2P payment apps grew from 24% in 2020 to 61% in 2021.

6. Dominican Republic

   Between 2020 and 2021, online card payments on domestic websites nearly doubled to 21 million. Payments on international websites grew to 42 million.

7. Colombia

   In Colombia, debit card ownership reached 88% in 2021, compared to 54% for credit cards. The use of digital wallets increased dramatically from 0.7% of users in 2020 to 31% in 2021.

8. Peru

   P2P payment apps saw strong growth during the pandemic. In Peru, their use among banking internet users increased from 24% in 2020 to 61% in 2021.

Forecasts and Conclusions

The share of alternative payment methods in LATAM e-commerce is expected to reach 30% by 2024, and in some countries, such as Argentina (43%), Colombia (41%) and Brazil (31%), the share will be even higher.  The growth of digital payments in Latin America is gaining strong momentum.

«LaFinteca is playing a key role in this digital revolution, opening new paths in the world of payments and transactions. With customized payment solutions, robust security and a customer-centric approach, this brand embodies the essence of efficiency and growth.»