Payments Landscape: Latin America

A diverse market with unique payment methods
August 14, 2023 | Expertise

Understanding the Latin American Market for Ecommerce

Latin America is a diverse market for payments, and one that is undergoing rapid change. Currently, only around 60% of Latin Americans have a bank account, which is well below the global average of roughly 70%. In some countries, the population with access to a bank account has risen significantly over the past few years. There are large discrepancies between individual countries, with 84% of Brazilians and Venezuelans having a bank account in 2021 (Source: Statista, June 2022) compared to just over a quarter (26%) in Nicaragua.

Covid-19 saw a concerted push in Latin America towards expanding coverage of open banking services and other digital payment methods. This has seen the unbanked population reduced significantly in some countries, particularly Brazil, where PIX has had a big impact in this respect.

Credit card adoption is low across the region, with only around a fifth of the population owning a credit card. This means that alternative payment methods are far more important in the Latin American market than in North America and Europe. These solutions have played a major role in opening up access to e-commerce to the wider population, giving people without credit cards and small entrepreneurs a simple means of making and receiving payments. Other popular payment methods for online purchases are voucher systems. Upon completing an order, the consumer receives a voucher that they can take to a participating store, post office or service station to complete the payment with cash. These vouchers can take various forms, such as a barcode, digital codes, QR codes etc. and are ubiquitous across the region.

Percentage of Latin Americans with a bank account by selected country

Popular Payment Methods in Latin America

Argentina

  • Mercado Pago - Mercado Pago is a digital wallet that can be used to make online payments as well as transfer and receive funds.
  • Pago Fácil - Pago Facil is a leading cash payment method. Consumers can make cash payments for online purchases by paying in cash at any participating store using a voucher barcode. It also supports money transfers.
  • Rapipago - RapiPago allows users to make cash payments using a voucher system. Online shoppers can generate a digital code at checkout which is then paid in cash at participating stores.

Brazil

  • PIX - PIX is an open banking solution created by the Brazilian Central Bank. It supports instant payments via bank transfer.
  • Boleto Bancário - Boleto is a popular Brazilian cash-based payment method. Payment is made with a voucher that is issued at checkout and then paid at a Brazilian bank or participating retailer, online with internet banking or via a banking app.

Chile

  • Khipu - Khipu is a popular open banking solution that allows consumers to pay for purchases using their bank account. 
  • Servipag - Servipag allows users to make online payments using cash using vouchers as well as via internet banking or debit cards.

Colombia

  • Efecty - Efecty is a voucher-based cash payment system. Efecty also supports domestic and international money transfers and can be used to make payments directly from the consumer’s bank account.
  • Nequi - Nequi is a digital bank that offers a wide range of services and can be used by anyone over the age of 13.
  • Via Baloto - Via Baloto supports both cash payments via voucher as well as card payments.

Mexico

  • OXXO - OXXO is a Mexican cash payment method that allows users to make online payments via vouchers.
  • SPEI - SPEI is a system developed and operated by Banco de México that facilitates quick electronic payments via online banking.

Peru

  • Pago Efectivo - PagoEfectivo is a payment method based upon a payment code. The code is sent via email or app and can be used to complete payment at affiliate stores like a voucher, or via the consumer’s bank account.

Ecuador

  • Pago Efectivo - PagoEfectivo is a payment method based upon a payment code. The code is sent via email or app and can be used to complete payment at affiliate stores like a voucher, or via the consumer’s bank account.

Panama

  • Nequi - Nequi is a digital bank that offers a wide range of services.

Connections to these payment methods are available via IXOPAY’s partners PPRO, dLocal and EBANX.

Fast-growing Market with Potential

Latin America is a fast-growing e-commerce market, with annual growth rates of around 30% forecast until 2025 (Source: Statista). With a wide range of popular alternative payment methods that differ by country and make up a significant portion of online transactions, merchants operating in the region need to cater to national preferences or risk excluding a large number of potential customers. Low credit card adoption rates and a heterogeneous banking landscape means that various cash payment options are expected as a payment option by consumers.

IXOPAY provides merchants with access to all of the most popular payment methods in markets across the region thanks to our wide range of partners. PPRO, dLocal and EBANX all service the Latin American market. All these providers can be integrated into your payments setup using IXOPAY’s API. This eliminates one of the major challenges of offering a wide range of different payment methods: multiple API integrations. A single API from IXOPAY is all that is required to offer local consumers the payment methods they expect, and makes it easy to add additional methods as needed. IXOPAY and its partner network thus gives you direct access to a rapidly growing market that is already home to more than 300 million digital buyers.

About IXOPAY

IXOPAY is a best-of-breed payment orchestration platform offering flexible and independent global payment processing options. Fully PCI-DSS Level 1 certified and highly scalable, IXOPAY caters to the needs of enterprise merchants and white label clients, including payment service providers (PSPs), acquirers and independent sales organizations (ISOs). Built upon modern, easily extendable architecture, IXOPAY provides smart transaction routing with cascading, state-of-the-art risk and fraud management, fully automated reconciliation and settlements processing, comprehensive reporting and access to hundreds of acquirers, payment service providers and alternative payment methods.

IXOPAY is trusted by national and international enterprises and has offices in Austria and the USA. The company has grown from 2 to around 160 employees by delivering innovative products and solutions.

For more information, visit: https://www.ixopay.com