MEXICO: E-commerce drives adoption of digital payments in Latin America

What are the new financial proposals that are triumphing in Latam? Fernando Armada, Chief Strategy Officer of GroupM Latam, tells us:

These trends indicate a shift in consumers’ preferred payment methods: credit cards are losing ground to digital wallets and A2A systems.”

— Fernando Armada, Chief Strategy Officer of GroupM Latam

MEXICO CITY, MEXICO, February 14, 2025 / EINPresswire.com / -- The sustained growth of e-commerce in Latin America has found a strong ally in the penetration of digital payment methods among the population. Before the pandemic, the volume of e-commerce in the region was 70 million dollars, with projections pointing to reaching 354 million dollars by 2027. This increase is driven by the adoption of cashless payments, although the outlook faces challenges due to the low use of banked or digital payment methods.

FIS's "The Global Payment Report" highlights that the use of account-to-account (A2A) applications has experienced significant growth, revolutionizing the sector in just five years. This system offers a competitive alternative to traditional banking, which must now seek alliances to attract and retain customers, especially in terms of financial inclusion for rural areas and informal businesses.

Initiatives such as the Central Bank of Brazil’s Pix and the Central Bank of Argentina’s Transferencias 3.0 have proven successful, with Pix reaching 122 million active users, representing 57% of Brazil’s adult population in its first three years. These systems enable instant electronic payments and transfers with reduced costs, facilitating consumer access and promoting the growth of the financial sector.

Digital wallets, such as Mercado Pago, RappiPay, PicPay, Nequi and Daviplata, are also gaining ground in the region. These products allow electronic payments, transfers and the secure storage of financial information. Their expansion is favored by the security they offer in the face of monetary instability and the possibility of making currency exchanges with little or no cost.

The movement towards a cashless economy is evident, with e-commerce and mobile commerce (m-commerce) tipping the balance in favor of digital transactions. In Colombia, for example, the Transfiya initiative allows account-to-account payments using only a cell phone. In addition, according to the FIS report, Pix has contributed to a significant reduction in the use of cash in Brazil.

These trends indicate a change in the payment methods preferred by consumers: credit cards are losing ground to digital wallets and A2A systems. In online purchases, virtual wallets are expected to increase their share from 21% to 28% in the next three years, while A2A payments will rise from 20% to 29%.

The technological transformationand digital transformation that the financial sector is experiencing in Latin America presents new challenges for traditional banking, which must adapt quickly to compete in a market increasingly inclined towards innovative and accessible solutions for the consumer.

About GroupM
GroupM is WPP’s media investment group and the world’s leading media investment firm, with a mission to shape the next era of media where advertising works better for people. The firm is responsible for more than $60 billion annually in media investment, as measured by independent research agency COMvergence. Through its global agencies Mindshare, Wavemaker, EssenceMediacom and T&Pm, as well as cross-channel performance (GroupM Nexus), data (Choreograph), entertainment (GroupM Motion Entertainment) and investment solutions, GroupM leverages a unique combination of global scale, expertise and innovation to generate sustained value for clients, wherever they do business. Find out more at www.groupm.com .