Bye boleto, hello digital wallets and buy now, pay later

EBANX's annual business event is now a series of podcasts. Learn all about the new micro-loans phenomenon in e-commerce with Latin America Summit Podcast's third episode

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29.Oct.2021 19:34 BRT
UPDATED 01.Nov.2021 16:27 BRT

There’s no denying it. The payment scenario in Latin America is going digital: the fintech revolution, together with new payments technologies are turning consumption (and money) into something digital.

Flexibility and the power of payment choice are driving the rapid adoption of new payment methods throughout the region. Another emerging payment model gaining traction in Latin America is Buy Now, Pay Later. Also known as BNPL, it provides a new path within credit to pay for a product or service later, and through installments.

But how is that changing the consumer behavior in the region? Will the growth of digital alternative payment methods be so aggressive that they may replace traditional card transactions at some point?

This is what we cover in the third episode of the Latin America Summit Podcast, the annual business event powered by EBANX, the Brazilian unicorn that owns LABS, turned into a podcast this year.

Unlike a credit card or a line of credit issued by a bank, BNPL lets consumers pay for purchases via short-term loans that most often have no interest fees for shoppers. These micro-loans are approved at the time of purchase, and there are two primary ways of borrowing.

The first is a point-of-sale loan, in which a BNPL provider partners with merchants to offer financing at checkout. The other is an installment plan that lets people buy online and pay for their items in a predetermined number of installments. Both involve a credit-validation step that is typically managed by the BNPL service provider.

To be clear, BNPL could easily be called Buy Now and pay over the course of several months. And even though that’s a relatively new concept in North America and Europe, it’s one of the oldest ways people buy stuff in Latin America. Actually, for some countries, this is actually the most accessible way to consume products and services.

To know how exactly is this happening, hostess Chelsey Peña talked to two executives of leading BNPL players in Latin America: Cristina Cacho, chief revenue officer at Kueski, an online lending company that became known for its “Kueski Cash” product, an almost real-time microloan focused on the Mexican middle class; and Daniel Vallejo, co-founder of Addi, a tech company that seeks to promote and enable digital commerce in LatAm.

Two other guests also give their perspectives about why digital wallets and BNPL have been so transformative in terms of credit and e-commerce: Amanda Jacobson, chief of staff for Oyster Financial, a digital financial platform for small- and medium-sized businesses in Mexico, and John Price, managing director at Americas Market Intelligence (AMI), the leading market intelligence and research firm in Latin America.

Wanting to know what all these experts have to say about the BNPL and digital payments? Listen to Latin America Summit Podcast on your favorite platform: Spotify, Deezer, Google Podcasts, and Apple Podcasts.

Every week, a new episode of the Latin America Summit Podcast will be available on all the leading platforms, as well as on the event’s website and LABS.

Stay tuned!