In Payments

On April 20, 2022, the Americas Market Intelligence (AMI) payments team held a lengthy discussion about Megatrends 2022 in the payments ecosystem of Latin America, through a two-day webinar. (Click here to read the day-two recap.)

Day one of the Payments Megatrends Webinar saw a discussion of disruptive changes around a common theme: the construction of a real-time payments infrastructure in Latin America. The team’s special guest was Juan Miguel Guerra, CEO of Revolut in Mexico. Day one’s agenda looked at three megatrends:

  1. Instant transfers in Latin America are competing for market share
  2. Open banking’s “payment initiation” is speeding up ACH payments in Latin America
  3. The online buying experience in Latin America is becoming more immersive and direct

Go to the video of day 1 of the webinar>>

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These three megatrends are emerging after the success of payment models like Pix in Brazil, and the advance of open banking promoted by governments and the market. Today, new players in the ecosystem are revolutionizing its technology infrastructure, improving access to banking products and coverage to businesses, and also providing mechanisms for instant or real-time payment.

“With the success of Pix in Brazil, we have seen instant payments evolve through ACH and other alternative networks,” says Lindsay Lehr, head of AMI’s payments division. “In fact, we are watching the [Pix] model being replicated—with different variations—through the region, which seems to be accelerating and promoting the use of open banking. We might well say that ACH payments are even being integrated into the online purchasing experience, and new and innovative payment models are emerging that directly affect online consumption, particularly e-commerce.”

1. Pix and Beyond
Instant money transfers are competing for market share in the POS

AMI analysis shows that, by the last quarter of 2021, Pix had become the most popular payment method in Brazil in terms of number of transactions. In 2021, P2B payments reached a turnover equivalent to 84 billion dollars—a 10% share with respect to other verticals.

In 2021, the Pix model in Brazil accounted for 15% of e-commerce payments, according to Americas Market Intelligence.

Other instant transfer models are impacting the payment ecosystem in Latin America in a similar way to Pix. Significant among them are Yappy (Panama), Simple (Bolivia), Transfiya (Colombia), and SINPE Móvil (Costa Rica). Some of these players are now implementing models of interoperability between banks and wallets through QR codes.

For more information: Go to the presentation of the webinar on Payments Megatrends in LatAm 2022>>

2. Open Banking’s “Payment Initiation”
Payment initiation will accelerate the disruption Pix has caused in Brazil. FaaS (Function as a Service) will facilitate this trend.

Brazil is the only country in Latin America with established regulation on open banking. In 2022, Transactional Initiation was launched, which allows non-banking actors to provide payment services to their users, under special license from the Central Bank. With regard to Pix, a payment initiator would reduce any transaction to three steps (from the current seven steps), and better yet, without leaving the merchant’s app. In addition, in Brazil, companies like Dock and FitBank are offering FaaS-like services to non-banking players. This is turning FaaS providers into facilitators of open banking. By contrast, in countries like Mexico, open banking regulation has been delayed; while in others, such as Chile and Colombia, there is some movement underway on this.

For more information: Go to the presentation of the webinar on Payments Megatrends in LatAm 2022>>

3. Transformation of the Buying Experience
New purchasing habits are appearing in a scenario involving social commerce, live shopping, and cryptocurrencies

Electronic commerce has evolved to a point where the interaction between brands and consumers is becoming ever closer. In Latin America, the “live shopping” sales model, as well as “shoppertainment” are beginning to take shape. These models offer sales of products by means of other users or influencers, through live interaction platforms such as Facebook Live.

On the other hand, social commerce is on the increase in Latin America, with Brazil having the highest rate of adoption (63% of Brazilians have made purchases on social networks) followed by Mexico (57%), Colombia (54%), and Argentina (38%), according to Rapyd. In these countries, bank transfers were the most widely used payment method on social networks.

50% of social commerce buyers made their purchase by bank transfer

Lastly, some businesses in Latin America are now accepting cryptocurrencies as payment methods. Pioneers in this method are Elektra (allied with Bitpay), Rappy (allied with Bitso and Bitpay), and Shopify (allied with Coinbase).

AMI interviews show that one in five crypto users in Latin America have used their assets to make purchases

For more information: Go to the presentation of the webinar on Payments Megatrends in LatAm 2022>>

More Exclusive AMI Data on Payments Megatrends 2022

The megatrends mentioned here are based on data collection and expert analysis by the Americas Market Intelligence payments team. A lot of other important data were shared on day 1 of the Payments Megatrends Webinar, including the following:

  • The volume of P2B Pix transactions in Brazil reached 84 billion dollars in 2021
  • 28% of Pix’s P2B volume in 2021 was attributed to e-commerce purchases
  • 70% of all online stores with a presence in Brazil accept Pix
  • Some market players believe Pix will account for between 30% and 40% of e-commerce payments in the next few years
  • Transferencias 3.0 (Argentina) and Transfiya (Colombia) are successful examples of the system of interoperability via QR codes
  • Instant transfer solutions such as Yappy in Panama have already broken the barrier of 25% (of the total population) in terms of adoption
  • 73% of people using social commerce in LatAm have made their purchases through Facebook
  • Bank transfers are the preferred payment method for social commerce in Latin America, with 50% of people who used this payment method; followed by PayPal (34%), and debit cards (27%)

And much more.

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Download the presentation on Payments Megatrends in LatAm 2022

Watch the video of the first day of the conference on Payment Megatrends in LatAm 2022

A look at the infrastructure of real-time payments, removal of payment barriers, and reduction in accessibility gaps.

Other Available Data on the Payments Industry in Latin America

Aside from the information shared in this webinar, Americas Market Intelligence (AMI) offers its clients a variety of exclusive data on payment methods in Latin America, including:

  • Spending in credit and debit in Latin America
  • Market share of new payment models, such as BNPL and social commerce
  • Total e-commerce spending by payment method in Latin America
  • Exhaustive 2020–2024 data on electronic commerce in 11 LatAm markets
  • List of fintech providers, payment facilitators and industry players, and their impact on Latin American markets

Contact us for pricing, and payment and delivery options.

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The Cryptocurrency Revolution in Latin America Payments

A free whitepaper detailing the growth of crypto, current use cases and what to expect in 2022 and beyond

Moving Beyond the Data

We conduct a variety of market intelligence studies aimed at identifying opportunities, reducing risks associated with regulations or processes, and finding allies in specific local markets. In the payment sector alone, Americas Market Intelligence has conducted more than 400 studies for major companies worldwide. Contact us to find out more.

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