Cash Remains Dominant Amid Rise in Latin American Payment Choice
Cash is strongly preferred for face-to-face payments across Latin America, accounting for 75 percent of in-person retail spending in 2020 even as new payment choices have become available.
According to research from PYMNTS.com—a global source of data on innovation in the payments landscape—the pandemic brought a significant rise in cashless payment options, however the market for these is fragmented, with popularity varying by country and cash remaining dominant.
The pandemic did not break cash’s hold on the Latin American payments space, with paper money remaining the most popular way for individuals to transact by far.
The research notes that Latin America’s retail eCommerce market surged by nearly 37 percent in 2020, compared with 32 percent for North America, 26 percent in Asia-Pacific, 26 percent in Western Europe and a global average of 28 percent. Argentina topped the list of growth markets in the region, recording a 79 percent rise.
85 percent of the region’s eCommerce transactions were paid for with cash as of 2019, with systems in place to accommodate voucher-based payments that ensure unbanked customers have access to the online economy. This is key given another recent study by Mastercard and Americas Market Intelligence suggested 81 percent of Latin Americans did not own a credit card in 2020, and 45 percent had no bank accounts.
Progress is being made, however, with PYMNTS.com recording 40 million new enrolments at banks across the region last year—primarily driven by the need to receive government support payments—which saw the overall banked population grow by 24 percent.