Latest publications

Blog

Digital payments in Latin America What to expect next?

Share

Latam digital payment trends

 

Due to constant technological advances and increased adoption of smartphones and electronic devices, more and more people in Latin America are using digital payment methods to make their financial transactions quickly and securely. What to expect from digital payments in the future? We analyze it below.

In Latin America, consumers have already embraced digitalization as part of their daily lives, and according to experts, the convenience and agility provided by digital payments have been fundamental to their growth in our region.

 

According to Mastercard’s Latin American and Caribbean Consumer Payment Behavior ReportIn the region, 77% of consumers use some type of digital or electronic payment, with credit and debit cards in physical or digital format being the most widely used payment instruments for online and in-store purchases.

 

Cash loses ground in Latin America

trends digital payments Latin America

 

According to this trend, 2023 was the first year in which cash was not the main means of payment in the region with a use of 45% of total payment options, among which digital wallets, mobile payments and QR payment codes gained preference, according to the Mastercard study.

Mobile payments are now positioned as the new payment trend, due to their ease of use, security and low cost, with 44% of consumers in the region using a mobile device to make a transaction by the end of 2023.

But within the universe of digital and mobile payments, there are payment options that are gaining preference among users and that should be known, since they are shaping the future of the payment ecosystem in the world and our region.

Key trends in digital payments in Latin America

 

  • Boom in the use of mobile wallets: This trend began after the pandemic and continues to gain momentum in our region, where by 2023, 37% of consumers used digital wallets to make transactions online or in physical stores, due to the convenience, speed and accessibility they offer and projecting an increase in their use to 47% by 2024. The popularity of mobile wallets has also driven other trends such as the increased use of digital cards and interoperability between digital wallets and banking apps through QR codes, which is a soon-to-be-released development.

 

  • Immediate payments, seamless and secure experiences: This includes trends such as A2A or Tap to Phone payments, where transactions are made from a cell phone and immediately. through a seamless, connected and secure digital ecosystem, forcing the further development of other innovations such as open financial ecosystems and the Open Finance. To achieve seamless and secure payments, the expansion of integrated financial ecosystems, embedded finance and banking as a service must continue. through central platforms that bring together all the financial services that a user may need, regardless of whether they are offered by different providers: from immediate and low-cost interbank transfers, payment of services, access to investment and credit products, to the purchase of other goods.

 

  • Open Finance: This trend, also known as Open Finance specifically refers to the initiative to share financial data in a secure and standardized manner among different financial institutions and service providers. to offer personalized and complete products to users, closely linked to the development of integrated financial ecosystems.This opening of financial data drives innovation and competitiveness in the market, favoring institutions that offer disruptive and innovative services, such as instant payment methods connected to the entire ecosystem, as in the case of instant physical and digital cards, that can turn a bank’s App into a digital wallet.

 

  • Integration of AI in transactions: Artificial Intelligence is also making inroads in the financial services sector and now we see it integrated into payments to simplify and improve interactions between customers and merchants or banks. The vast amount of information that AI can process helps financial institutions understand who their customers are and provide a personalized service offering according to their preferences.

 

On the other hand, AI helps to simplify a transaction with the automation of tasks, also offering increased security, as it can also be used to detect and prevent fraud by monitoring transactions and detecting suspicious activity.

Challenges for the consolidation of digital payments in Latin America

 

Despite the clear preference that is developing in the region for digital payments, experts point out that they still have a big challenge to match the expectations users have of cashThese include immediacy, which allows them to check the balance and confirm the completion of a transaction in real time.

Therefore, financial institutions that want to lead the sector must increase the offer of immediate payments, implementing A2A payments or self-service payments that meet the agility and simplicity sought by today’s Latin American consumers.

Another concern for consumers is the privacy of their data in the world of digital transactions, with 73% of respondents saying that privacy is a top priority and that they always choose payment methods that protect their data. 73% of respondents indicated that privacy is an undisputed priority and that they always choose payment methods that protect their data.

 

What to expect in the near future

 

Undoubtedly, the future of digital payments in Latin America is characterized by the search for continuous innovation, personalized services, frictionless ecosystems and payment methods that guarantee immediacy and security in every transaction, as today’s banking customer expects.

For this reason, financial institutions that want to be a reference in the region’s payment ecosystem must offer users immediate and secure means of payment with the possibility of delivering a physical or digital card instantly for transactions and purchases at any time or place.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may be interested in

The impact of bank card personalization: increase activation and usage.

Optimize student enrollment with state-of-the-art technology.

The future of airports: Passenger facial recognition for faster, safer boarding.

Our intelligent identity identification, payment and data protection solutions will evolve the security of your organization.

Let's talk: