Top Payment Methods in Latin America

    Leading Payment Methods in Latin America
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    Latin America is a region that has undergone a significant transformation in payment methods in the last five years because of two fundamental aspects: digitalization and financial inclusion, which are complementary to each other. While access to bank accounts, the Internet, and smartphones has not topped regions like North America yet (see graph below), the situation did improve considerably after COVID-19. According to a 2023 study by Mastercard and Americas Market Intelligence,1 the distribution of government aid during the pandemic in Latin America contributed to some 15% of respondents opening a savings or deposit account for the first time. In turn, the percentage of consumers using cash only in purchases fell from 45% to 21%.

    Financial and Technological Penetration in Latin America versus North America, 2023

    As a consequence, the most popular payment methods in Latin America changed. Currently, the situation could result in:

    1. A significant decrease in the use of cash for transactions both online and offline

    1. Less and less widespread use of credit and debit cards in Latin America

    1. A consequent increase in alternative payment methods in the form of digital wallets and RTP systems. In fact, Latin America is the region with the highest projection of RTP growth in the world (a CAGR of 29% between 2022 and 2027, according to ACI Worldwide2

    Below is a breakdown of the leading payment methods across the region, to then show the main payment methods in its six key markets: Brazil, Mexico, Colombia, Argentina, Chile, and Peru.


    Leading payment methods in Latin America

    Top payment methods for online purchases in Latin America

    Payments and Commerce Market Intelligence (PCMI) is the leading payments intelligence firm globally, with outstanding research in payment methods in Latin American e-commerce.

    The most recent update to its E-commerce Data Library mentions the following payment methods in Latin America by share of market volume in 2023 (see graph). These calculations are made taking into account the contribution of 15 Latin American markets.

    Payment Methods for E-commerce in Latin America 2023

    Payments with Pix in Latin American e-commerce

    The situation with Pix is unique in a way because it alone makes up 16% of payments for purchases online across Latin America, even though this payment system is only located in Brazil, at least for the time being.

    Note: the Pix International platform is under development for cross-border purchases and the use of Pix in Latin America. However, because of the system’s complexity a launch date has yet to be determined.

    Payments by credit card in Latin American e-commerce

    Credit cards still have the biggest market share for e-commerce payment methods in Latin America in 2023, equivalent to 48%. However, there has been a decline in the use of cards in the region. In 2019, historical data from PCMI show a 56% market share for credit cards, representing a decrease of eight percentage points over the past four years.

    Alternative payment methods in Latin American e-commerce

    The use of digital wallets and A2A systems (“account-to-account payments”) constitutes 33% of e-commerce turnover in Latin America, according to PCMI. We estimate that A2A payment methods in Latin America will have the highest share in the world thanks to the contribution of Pix.

    In addition to Pix, the rise of alternative payment methods in Latin America is evidenced by the popularity of systems like Nequi and Daviplata (Colombia), Yape and Plin (Peru), Modo (Argentina), SINPE Móvil (Costa Rica), and MACH (Chile). There are a range of options in the region, from private solutions with closed loop systems, to government-managed ones, and interoperable open systems.

    Top payment methods for in-person purchases in Latin America

    In terms of payment methods for in-person transactions in Latin America, it is worth mentioning the latest data from the company Worldpay,3 looking at the contribution of the top six markets: Argentina, Brazil, Chile, Colombia, Mexico, and Peru:

    Payment Methods in Latin America at the Point of Sale (POS)

    Cash payment for in-person purchases in Latin America

    Cash continues to dominate for in-person payments in Latin America, accounting for 31% of turnover. However, a potential decrease of nine percentage points by 2026 is projected by Worldpay, which sees cash’s share dropping to 22% in Latin America.

    Payments with digital wallets in Latin America

    According to Worldpay’s report, digital wallets will reach a 24% share of in-person sales in Latin America in 2026. This would represent a nine-point increase over 2022.

    The trend coincides with the global dominance of digital wallets, which we explain in detail in our article on global payment methods. What is interesting is that, in Latin America, wallets began operating in most countries around the end of the pandemic, a relatively short time ago. In broad terms, there are two main types of technology: tokenized wallets based on cards (such as Apple Pay and Google Pay), and wallets that store a balance of money and/or save cards connected to bank accounts.


    Latin America: payment methods in its six leading markets

    Having made this general analysis, we now need to look at the differences between the different markets. Below we show the most significant payment methods in the countries that make up 93% of online sales in the region, namely Brazil, Mexico, Colombia, Argentina, Chile, and Peru. For electronic commerce, we used the 2023 data from our E-commerce Data Library. For payment methods in face-to-face purchases, we used the 2022 data available in the Worldpay report (2023).4

    To facilitate browsing, you can choose the country you are interested in from the menu below:

    Leading Payment methods in Brazil

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    Top payment methods for e-commerce in Brazil

    In Brazilian e-commerce, credit cards lead the way with a 49% share, followed by Pix with 29%. PCMI expects Pix’s share to equal that of credit cards by 2026.

    Brazil: leading payment methods for e-commerce in 2023

    Top payment methods for in-person purchases in Brazil

    Credit cards are the leading payment method at the POS (points of sale). However, there have been fundamental changes over the past few years with respect to other payment methods. According to the Worldpay report:

    Cash was the dominant method in 2018, with a surprising 52% share of turnover in Brazil. With the arrival of Pix and the pandemic, this share fell to 31% in 2021 and then to 26% in 2022.

    The use of digital wallets as a payment method in POS transactions has doubled: from an 8% share in 2021 to 15% in 2022, thanks to the rise of solutions like PicPay. Pix transactions are often facilitated through these wallets or mobile banking apps.

    Brazil: leading payment methods for in-person purchases in 2022

    Leading payment methods in Mexico

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    Top payment methods for e-commerce in Mexico

    In Mexican e-commerce credit cards were leading with a 41% share of the turnover in 2023. PCMI forecasts that this share and that of the other payment methods will remain relatively stable by 2026, with the exception of Buy Now Pay Later.

    In fact, BNPL as a payment method for e-commerce in Mexico has the highest compound annual growth rate (CAGR) compared to other payment methods in the country—and throughout the region—equivalent to 57% between 2023 and 2026.

    Mexico: leading payment methods for e-commerce in 2023

    Top payment methods for in-person purchases in Mexico

    In the case of Mexico, cash remains the dominant payment method for in-person purchases with a share of 39% in 2022, although this is a two-point decrease over 2021.

    Worldpay’s report also highlights the relevance that BNPL will have as a payment method in Mexico, thanks to a rise in startups geared toward providing credit to the population that lacks access to financial services. Mexico currently has several local BNPL providers, for example, Kueski and Aplazo. Colombian company Addi, and Mercado Libre (through its “Mercado Crédito) are also competing in Mexico.

    Mexico: leading payment methods for in-person purchases in 2022

    Leading payment methods in Colombia

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    Top payment methods for e-commerce in Colombia

    The credit card is the most popular payment in Colombian e-commerce, although its share is expected to decrease two percentage points by 2026.

    Bank transfers are the second most popular payment method in Colombia. PCMI forecasts that bank transfers in Colombia will match the market share of credit cards in 2026, with a 40% share. The success of this payment method is due in part to the PSE button, a mechanism adopted by most of the country’s e-commerce platforms, and for different collection systems, including public utilities.

    Colombia: leading payment methods for e-commerce in 2023

    Top payment methods for in-person purchases in Colombia

    According to Worldpay, Colombia is a country with a “cash-intensive economy.” Even so, in transactions at points of sale, cash as a payment method fell from a share of 42% in 2021 to 36% in 2022. The firm forecasts a continuous decline in cash payments, at a compound annual rate of -2% by 2026.

    In digital wallets, Colombia has a wide variety of options, many of them led even by traditional banks. This is the case with Nequi and DaviPlata, the most popular wallets, developed by Bancolombia and Davivienda, respectively.

    Colombia: leading payment methods for in-person purchases in 2022

    Leading payment methods in Argentina

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    Top payment methods for e-commerce in Argentina

    In Argentinian e-commerce the credit card is the most popular method, with a 54% share as of 2023, according to PCMI. Unlike other Latin American markets, we forecast that the credit card’s market share will rise to 58% in 2026.

    Conversely, we anticipate that methods such as debit cards will lose market share (from 15% in 2023 to 12% in 2026).

    Argentina: leading payment methods for e-commerce in 2023

    Top payment methods for in-person purchases in Argentina

    With regard to in-person purchases in Argentina, the most popular payment methods are cash and cards. However, digital wallets, currently in fourth place with a 17% share of turnover, have an excellent growth projection with a CAGR of 21% between 2022 and 2026, according to Worldpay. To date, the country has more than 20 digital wallets. In addition, the Central Bank has issued new regulations to improve the financial experience.

    Argentina: main payment methods for in-person purchases in 2022

    Leading payment methods in Chile

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    Top payment methods for e-commerce in Chile

    Chilean e-commerce is rather peculiar in that a surprising 76% of online turnover is paid for by credit card, according to PCMI. This is the highest proportion among the Latin American markets, with a forecasted growth of 17% in 2024, even though its share will decrease by two percentage points by 2026.

    Digital wallets, despite contributing just 7% to online turnover in Chile in 2023, have a far higher growth projection, with a 24% CAGR. In 2026, the market share of digital wallets in Chile will be 8%.

    Chile: leading payment methods for e-commerce in 2023

    Top payment methods for in-person purchases in Chile

    For in-person purchases, Chileans still prefer to use cards, although here the debit card takes first place.

    In spite of this, growth projections in Chile for digital wallets are good, with a two-point increase in 2022. According to Worldpay, wallets are growing at the expense of cash, whose share of in-person purchases in Chile fell from 27% in 2021 to 23% in 2022.

    Chile: leading payment methods for in-person purchases in 2022

    Leading payment methods in Peru

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    Top payment methods for e-commerce in Peru

    In Peruvian e-commerce the debit card is the most popular payment method with a 45% share of the turnover in 2023. This is followed by the credit card, 25 points behind it with just 20% of the market share. This situation is quite fascinating since, according to PCMI forecasts, the debit card as an online payment method in Peru will account for 59% of domestic turnover in 2026, thanks to its 48% CAGR. Meanwhile, credit card growth will be limited to a CAGR of between 15% and 25%.

    Another payment method in Peru with interesting projections is BNPL. Despite having a market share of less than 1% in 2023, PCMI forecasts a 55% CAGR for this payment method between 2023 and 2026.

    Peru: leading payment methods for e-commerce in 2023

    Top payment methods for in-person purchases in Peru

    According to Worldpay, the predominance of cash in face-to-face transactions in Peru is indicative of a payments ecosystem in transition. Between 2011 and 2021, its report says, the number of consumers with bank accounts tripled in Peru. Financial penetration among the adult population increased from 20% to 57% during that period. Consequently, the use of cash as a payment method fell from a 60% share of in-person sales in 2019 to a 37% share in 2022.

    Peru: leading payment methods for in-person purchases in 2022

    Next steps

    Move beyond these data to understand why certain methods are predominant in certain markets and what changes we should expect in the future. Our team can design a study to provide this kind of analysis, as well as other types of market research, including:

    • Competitive intelligence about your rivals in different markets

    • Assessment of potential partners if you are interested in joining a new market

    • Assessment of opportunities with different sectors or subsectors of the market in specific countries

    • Analysis of behaviors and trends among consumers in terms of their use of payment methods, online and offline consumption, and more

    We invite you to explore our services.


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    Sources

    1. Mastercard, Americas Market Intelligence, 2023. The State of Financial Inclusion in Latin America ↩︎
    2. ACI Worldwide, 2023. 2023 Prime Time for Real-Time Report ↩︎
    3. FIS, Worldpay from FIS, 2023. The Global Payments Report, 8th edition ↩︎
    4. FIS, Worldpay from FIS, 2023. The Global Payments Report, 8th edition. ↩︎

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    Payments and Commerce Market Intelligence (PCMI) is a strategy consultancy specializing in the global payments industry.

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