In Payments

The Buy Now Pay Later (BNPL) model is looking to be a payment method with enormous potential in the Latin American region. Recently, our payments practice area at Americas Market Intelligence (AMI) got together with some people who are interested in the sector in a Payments Coffee Chat to discuss the disruptive potential of BNPL in Latin America.

AMI Payments Coffee Chats are free Zoom meetings where AMI’s payments team looks at important topics in the payments sector of Latin America. They take place every two weeks, Mondays at 11 am (Miami time). They are generally held in English, but questions and comments can be made in Spanish and Portuguese. You can register here to join the AMI Payments Coffee Chats. They are free of charge.

Below is a summary of some key points discussed in this Chat.

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The Growth of BNPL in LatAm

Latin America is a poorly banked region whose smartphone penetration (76%) outstrips the number of consumers who have any kind of bank account (69%), according to AMI analysis. BNPL offers credit linked to the buyer’s identity rather than a banking credential. In fact, the competitive edge of BNPL seems to lie among people who want access to credit without a bank account. Although, precisely because of this, heavy development is open-banking solutions — and regulations — is needed.

Properly executed, the BNPL model in Latin America could capture 20% of the region’s electronic commerce, according to preliminary analyses by AMI. AMI analyst Andreas Farge points to examples like Kueski Pay and Nelo, which offer the BNPL system in Mexico and have seen huge growth in recent months.

The BNPL model in Latin America could capture 20% of the region’s electronic commerce.

AMericas Market Intelligence

In addition, the AMI payments team has found that Mexico, Colombia, and Peru are among the countries with the biggest disruptive potential due to the BNPL model. This was determined using a data matrix where the percentage of credit card penetration in each country was crossed with the debt and wealth coefficient that defines the consumer’s average debt capacity. Another relevant trend is that, in Mexico, Colombia, Peru, and Chile, fewer credit cards were reported in 2021 than those circulating in 2015. This dynamic, no doubt driven by the pandemic, will benefit players of the BNPL model in the region.

There are several advantages related to the BNPL model, including that of closing the gap between consumer spending and trader costs, as well as the development of a centralized, sustainable payments ecosystem.

Lastly, there are certain business initiatives that suggest BNPL could be expanded toward other verticals. For example, the “Fly Now, Pay Later” system between American Express and Delta lets you schedule upcoming travel, which represents a BNPL credit option even in high purchase amounts.

All this and more was discussed at this Payments Coffee Chat about BPNL. For access to the full presentation shared in the Chat, click on the image below.

AMI Payments Coffee Chat: Buy Now, Pay Later in Latin America

If you are unable to see the link in your browser, click here.

We also invite you to register for AMI Payments Coffee Chats to get first-hand advance knowledge about the payments sector in Latin America.

Moving beyond the Chats

Get in touch with us if your company needs more strategic data about BNPL in Latin America. We can design and conduct a personalized study that will give you all the data and analysis you need to make decisions and improve your chances of success.

Apart from BNPL, our market intelligence team can help you with research on many other key topics of the payments sector in Latin America, including cryptocurrencies, e-commerce, payment methods between consumers and SMBs, mobile wallets, ACH, open banking, and much more. Contact us to let us know what you need and explore the possibilities of conducting a study.


Article Contributor

Andreas Farge

Andreas Farge

Senior Analyst

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