The latest publication from Hamburg-based desk research company yStats.com titled “Latin America Online Payment Methods 2022” shares insights into the recent trends and developments of the digital payment market in Latin America. The publication reveals that though alternative payment means surged since the onset of the COVID-19 pandemic, credit cards continue to dominate the B2C E-Commerce payment landscape in the region.
Payment digitalization in Latin America spurred during the pandemic
Following the onset of the COVID-19 pandemic, Latin America saw growing adoption of digital payments as opposed to more traditional payment means, such as physical cash. A forecast cited in this yStats.com report suggests that the share of POS transactions made using cash in Latin America will decrease from over one-third in 2021 to less than one-quarter in 2025. Non-cash payment means, especially cards, are on the growth path and already dominate the online payments channel. In addition, mobile wallet penetration is on the rise, with Latin America projected to have the third-highest number of mobile wallet users worldwide by 2025.
Domestic credit cards lead by B2C E-Commerce payments volume
Domestic credit card is the top online payment method in Latin America, making up almost one-third of total E-Commerce sales in 2021. Alternative payment means, however, outpace credit cards in terms of the growth rate, led by bank transfers and digital wallets. As a result, credit cards’ share of B2C E-Commerce revenues is projected to decrease, giving way to alternative payments.
Popular alternative payment methods include PIX and ServiPag
A new alternative method of payment is gaining popularity in the region’s largest online retail market, Brazil. PIX, a fast transfer service launched by Brazil’s central bank, is projected to reach one-tenth of the online payment volume within the next few years. A similar payment method launched in Mexico, Codi, is also growing at a rapid pace but is lagging behind the adoption rate of its Brazilian counterpart which is already used by half of Brazil’s population. Other local alternative payment means in Latin America include cash-based services, such as ServiPag in Peru. According to data cited in the yStats.com report, ServiPag was used by more than one-third of online shoppers in Peru, as of early 2022.