2025 Latin America Payments Outlook: The Ugly

The Good, The Bad and the Ugly in Latin America Payments 2025

We’ve already covered “The Good” and “The Bad” in separate pieces, but below we’re getting into more unsettling possibilities—the Ugly.

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The Ugly

A2A fraud ramps up, amidst an ill-prepared industry

The revolution of A2A payments in Latin America carries a dark side: the persistent and increasing threat of scams.

The card networks have invested billions in fraud protection and have established clear rules on who is liable and how to proceed in the case of fraud. Credit card holders have zero liability, which has helped gain consumer trust, and there are clear rules indicating who is liable. These benefits of paying with credit cards help to justify the fees card networks charge.

Yet, credit card fraud in Latin America is soaring, with rates 97% higher than in the US and 222% higher than in Asia Pacific, according to ThreatMark. It’s estimated that 20% of all payment volume is lost to fraud, an astronomical cost to merchants. In Mexico, an estimated one in five users has been a victim of payment fraud, including myself just two weeks ago, when three of my chip credit cards got cloned in a taxi transaction using an mPOS (shame on me). In Colombia, the government reports that identity theft and financial fraud has climbed over 400% since 2020.

This raises a conundrum. The card networks are supposedly the best at combating fraud, yet seem to be losing the battle in Latin America. Fear of card payment fraud is contributing to the adoption of account-to-account (A2A) payment methods, which are perceived by many Latin Americans as more secure.¹ There are several reasons for this: 1) A2A payments usually require biometric authentication to access one’s banking; 2) the payer is pushing the funds to the recipient, without exposing any of their payment details; and 3) there is no plastic to be compromised. Merchants also love A2A payments for their irrevocability and elimination of chargeback risk.

But what is good for merchants is risky to consumers. A2A payments may actually be riskier to the accountholders than cards, since transactions are instant and irrevocable, and there are no industry-wide standards around fraud, scams, consumer protections and disputes. This is a puzzling reality that deserves some unpacking. 

As A2A payments scale around the globe, their vulnerabilities are becoming increasingly apparent, with fraud attacks falling into four categories:

These types of fraud impact P2P, P2B and B2B transactions alike, with authorized push payment fraud (APP fraud) being the most common, relevant to all payment verticals.

Common types of A2A payment fraud

Common types of A2A payment fraud categorized by P2P, P2B, and B2B. Source: Kount

P2P	P2B	B2B
Phishing Scams – Fraudsters send fake emails, text messages, and even phone or video calls to trick users into sharing sensitive information.	Fake Invoices – Criminals create fraudulent payment requests, tricking consumers into sending money to illegitimate accounts.	Invoice Fraud – Fraudsters impersonate vendors, submitting fake invoices with updated payment details.
Social Engineering – Criminals pose as trusted contacts or service providers to manipulate users into sending payments.	Redirect Schemes – Fraudsters intercept legitimate payment requests and alter account details.	Business Email Compromise (BEC) – Criminals infiltrate corporate email systems, posing as executives or partners to authorize fraudulent transfers.
	Ecommerce Scams – Fraudulent websites or payment pages deceive consumers into sharing sensitive payment information.	Account Redirection – Fraudsters exploit weaknesses in payment approval workflows to reroute funds.
	Credential Theft – Login information is stolen through data breaches or malware, allowing fraudsters to access and misuse accounts.

Source: Kount

APP fraud is also the most insidious, since it represents an authorized payment by the user, albeit to a malicious recipient. Unlike in a fraudulent card transaction, in which the consumer has recourse and a protocol to follow, APP scam victims have no such protections when paying via bank transfer.

Globally, APP scam losses are projected to reach $7.8 billion, with total RTP-related fraud climbing to $40 billion.² In the region, Brazil is the market to watch on this subject matter. ACI Worldwide reports that Brazil, with the second-largest real-time payments system globally (Pix), is projected to experience the highest growth in APP scam losses compared to other analyzed markets: its losses totaled $380 million in 2023 and by 2028, are projected to increase by 40%.³ Datafolha reports that Brazilians receive 4,600 fraudulent phone calls or text messages per hour, all attempting to scam people out of their money.⁴

These numbers seem small compared to the $4 trillion in payment volume processed through Pix in 2024. In 2023, the Brazilian Central Bank passed Resolution 6, which requires financial institutions to collect data on fraudulent transactions and to share that data, much in line with best practices established in the UK. But that’s it—there are no other clear mandates on how to handle A2A fraud.

According to a 2023 survey conducted by FICO, 72% of Mexicans, 70% of Peruvians and 67% of Colombians expect their bank to refund them “most of the time” in the case of scams.⁵ But banks are under no official obligation to do so and have no protocols set in place to support consumers in such cases. After all, RTP payments are free to the consumer. There is very little incentive for financial institutions to provide any protection to consumers for the use of free and public rails. Amidst the growth of scams, this kind of mismatched expectations will eventually draw regulators’ attention.

What can regulators do? Lessons from Europe and Asia provide some hints:

None of this is in any kind of clear roadmap yet, but we can expect measures like these in the medium term. A2A networks will soon experience what the card networks have known for years: it takes financial investment and a certain amount of friction to secure payment rails. Does this put a ceiling on A2A’s meteoric growth in the region? It certainly does, but we can’t be sure how low this ceiling will be.

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