Financial Cards and Payments in Latin America

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.