Financial Cards and Payments in Latin America

Key Findings

Cash still important in Latin America

Although cash was consistently losing out to alternative forms of payment over the historic period, it continues to be an important mode of payment. In fact, it is still the dominant means of payment in a number of countries in the region. Nevertheless, as the banked population continues to expand and more retailers install POS payment terminals, consumers are increasingly being won over by the convenience of cashless payment methods. Government policies are 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. When possible, people avoided handling cash for hygiene reasons, encouraging greater use of card and, in particular, contactless payments. Debit cards benefited from this, with people also looking to keep control of their spending in a difficult economic environment.

M-commerce continues to grow

M-commerce continues to gain momentum across the region, with the pandemic representing an ideal environment for further growth in this area. Increasing internet penetration and smartphone ownership are also driving 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 positive growth expected from 2021

In spite of the economic impact of COVID-19, the post-pandemic period is expected to see a return to positive annual growth rates for consumer payments from 2021. Card payments will overtake cash payments in the region during the forecast period, while electronic direct/ACH transactions will be particularly dynamic, albeit growing from a still relatively small base.