What´s next for the Latin America payments ecosystem?
What´s next for the Latin America payments ecosystem?
As Latin America continues its growth fuelled by instant payment rails, innovative cross-border solutions, and neobank (banks that operate exclusively using online banking) partnerships, the opportunities have never been better
Recently, I had the privilege of participating in a panel discussion at Money 20/20 Las Vegas, delving into the future of the world’s fastest-growing payments market. In this blog, I’ll outline how to position your business at the forefront of success in Latin America.
Latin America stands out as an incredibly diverse region, comprising 33 countries with 14 different currencies that span large nations to some of the smallest economies globally. Although the proportion of people who do not have an account has been decreasing since 2014 in LAC, 41.67% of adults in the region still lack access to an account according to Global Findex figures for 2021. Because of this, the payments ecosystem in Latin America has been undergoing significant transformations, propelled by concerted efforts to bolster financial inclusion and by technological advancements and evolving consumer behaviours.
The intricacies of the payment landscape in Latin America are tied to consumption patterns. For Latin Americans, the freedom to choose their preferred payment methods is important. The economic, political, and cultural nuances of the region create a scenario where most consumers rely on alternative payment methods to conduct online transactions. Evidently, the population demonstrates a willingness to adapt their payment habits based on circumstances. Merchants, in turn, must not only acknowledge but embrace this diversity, offering payment methods tailored to local preferences.
Alternative payment solutions
Digital wallets have emerged as a payments channel that offer convenience and security, which have been widely adopted in mature markets and are now on the rise in Latin America. Digital wallets are experiencing widespread adoption throughout the region by helping to bring new people to digital commerce and becoming a hub for financial services and shopping experiences.
The rise of mobile wallet usage in Brazil highlights this trend. In 2021, mobile wallet users constituted more than one-third of the population. However, 2025 anticipates an impressive surge to encompass over three-quarters of the population.
Other popular alternative methods include online bank transfers (such as PSE in Colombia), or prepaid cash cards. The latter provides an accessible way for customers who do not have access to bank accounts (in part, due to the lack of brick-and-mortar infrastructure) to make purchases and payments.


Despite these options, cash remains popular too. Cash is the most common way to pay at POS, partly due to the lack of access to alternatives, or a lack of trust in banking institutions. Argentina’s cash use is at 34%, Brazil’s is 35% and Colombia’s is at 42%. eCash has a multitude of benefits for consumers including avoiding high fees, no complex application processes and no credit checks, meaning it’s a better experience for customers. As with mobile payments, cash payment solutions vary on a country-by-country basis, including Boleto in Brazil, Oxxo in Mexico, Servipag in Chile and Redpagos in Uruguay.
While convenience, simplicity and speed are all good reasons for alternative payment methods to be popular, there is also a real concern around security of financial information. Alternative payment methods are popular as they can give consumers access to eCommerce in a way that doesn’t make them feel like they are compromising their security. Alternative methods often don’t require consumers to enter their financial or personal details online in the way traditional payment methods do.
"Simplicity and speed are all good reasons for alternative payment methods to be popular, there is also a real concern around security of financial information”
What’s next?
For merchants, the intricacies of navigating diverse payment options within a given market can prove challenging. The future of a merchant's payment strategy hinges on understanding the geographical distribution of customers and their payment preferences. Payment providers also need to overcome intricate regulations and unstable economic systems.
As businesses look to expand into Latin America, they must have a heightened awareness of local nuances. In 2024, we can expect further innovation in areas such as digital wallets and other technologies aimed at enhancing financial services and inclusion so to streamline operations, merchants must seamlessly integrate various (including new) payment methods into a unified system. This extends beyond global trade, encompassing intra-regional transactions as well. In upcoming blog posts, we’ll expand on the landscape of payment challenges, exploring issues not only within Latin America but also on a global scale.
