“In Latin America, cash is king”, how many times have you ever heard someone saying this? Just a few years ago, it really was a true fact, but digital payments have already changed this game. Although it isn’t the most used method in the region, digital payments already have the highest growth rates, while the use of money is decreasing day by day.
In this widely connected region, forecasts are pointing out that 86% of adults will have a smartphone by 2025. But we don’t need to wait so long to be sure that the payments landscape in Latin America is getting more and more digital. According to data from Americas Market Intelligence (AMI), the credit cards are already the most used payment method in online purchases, meaning 52% of the total amount in e-commerces against 15% of cash voucher methods, such as Brazil’s boleto bancario, for example.
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And while the Latin American’s old fear of fraud and defensive behavior is being left behind, this market takes a much more modern stance, opening room for new payment methods to reinvent themselves in a digital environment. This is exactly the debit card’s case. Widely used in purchases in physical stores, this method keeps being too restricted in e-commerce. Although it is just about to change, this payment method is expected to grow by 29% per year by 2022, surpassing the estimated 20% growth for credit cards, according to AMI data.
READ MORE FROM LINDSAY LEHR: “E-commerce in Latin America: The time is now“
In a region that has already proven to be born to innovation and gave life to unicorns like Nubank, which reinvented the region’s banking market, and Rappi, which turned the logistical challenge into opportunity, the digital payment behavior is a natural answer from consumers used to have technology as their main ally to solve everyday problems.
And there’s a lot more to come. In this infographic designed by Americas Market Intelligence for LABS, not only the current scenario of rising digital payment methods is evident, but also the rapid growth trend for years to come, check it out: