Financial Cards and Payments in Latin America

November 2021

The overall consumer payments value performance will remain weak in 2021, after a challenging 2020, with Coronavirus (COVID-19) limiting spending opportunities and also having a major impact on local economies in the region. While the pandemic helped speed up the move away from cash, which has been declining in both 2020 and 2021, card payments will return to positive growth in 2021, and electronic direct/ACH transactions remained on a positive growth trajectory throughout the pandemic.

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Key Findings

Cash remains important in Latin America

Although cash was consistently losing out to alternative forms of payment over the historic period, with the pandemic and its lockdowns and hygiene concerns adding further impetus to this, it continues to be an important mode of payment – still the dominant payment means in many of the countries in the region. Nevertheless, consumers continue to be won over by the convenience of non-cash payment methods, with government policies also encouraging the trend towards financial inclusion and cashless transactions.

Dip in consumer payments due to COVID-19

Consumer spending patterns in Latin America were significantly affected by the pandemic in 2020, with total consumer payment transactions value still, just, in negative territory in 2021. For some, spending has been limited to essentials during the pandemic, due to the economic impact of the anti-COVID-19 measures. For most, avoiding the handling of cash for hygiene reasons was encouraged, driving use of card/contactless payments and electronic direct/ACH transactions.

Dynamic m-commerce

M-commerce has continued to gain momentum, with the pandemic representing an ideal environment for further growth in this area. Increasing internet penetration and smartphone ownership are also helping to drive the continued development of m-commerce, while the introduction and subsequent expansion of 5G networks across the region will provide additional impetus going forward.

Return to pre-pandemic levels could take a few years

In spite of the economic fallout from COVID-19, the post-pandemic period is expected to see a return to positive annual growth rates for consumer payments, but not until 2022, with a return to 2019 value levels expected to take a little longer. Card payments should overtake cash payments during the forecast period, with electronic direct/ACH transactions also remaining dynamic.

 

Introduction

Scope
Key findings

Regional Overview

Latin America recording weak regional performances
Financial cards perform better than overall consumer payments
Positive growth not expected again until 2022
Card payments will see an immediate return to positive growth in 2021
Card payments particularly dynamic in Brazil and Chile
Pandemic speeds up the move away from cash payments
Debit cards on the up as charge and store cards continue to struggle
Debit cards benefit from the pandemic
M-commerce payments continue registering strong growth

Leading Companies and Brands

Card operators competitive landscape extremely concentrated
Visa and Mastercard with a wide presence across the region
Visa and Mastercard remain the dominant financial card operators
Issuers competitive landscape more fragmented than operators

Forecast Projections

Consumer payments will take until 2022 to return to positive growth…
…and until 2024 to return to pre-pandemic levels
Card payment transactions to record strong forecast period growth
Pre-paid cards expected to be most dynamic over the forecast period
Further dynamic growth expected for m-commerce over 2021-2026
Mobile m-commerce remote will continue to dominate

Country Snapshots

Argentina: Market Context
Argentina: Competitive and Retail Landscape
Argentina: M-commerce and Consumer Payment Value
Brazil: Market Context
Brazil: Competitive and Retail Landscape
Brazil: M-commerce and Consumer Payment Value
Chile: Market Context
Chile: Competitive and Retail Landscape
Chile: M-commerce and Consumer Payment Value
Colombia: Market Context
Colombia: Competitive and Retail Landscape
Colombia: M-commerce and Consumer Payment Value
Mexico: Market Context
Mexico: Competitive and Retail Landscape
Mexico: M-commerce and Consumer Payment Value
Peru: Market Context
Peru: Competitive and Retail Landscape
Peru: M-commerce and Consumer Payment Value
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