Paytech South America Trending Weekend Read

LatAm Continues To Enjoy a Strong Appetite for Alternative Payments

Alternative payment methods (APMs) are becoming increasingly commonplace across Latin America (LatAm) as digital commerce continues to rise. 

When making payments, consumers in LatAm are increasingly opting for the alternative option; according to a new study by the Brazilian fintech EBANX.

The study, entitled ‘Beyond Borders 2022/2023‘ delves into the most current payment trends to emerge from the region, as well as how these trends are transforming the landscape for digital commerce.

Findings reveal that, as of the end of 2022, APMs are now retaining a 39 per cent share of the total digital commerce volume. The value of this share is described in the study to be worth around $400billion.

The study also notes that while APMs rise, the use of credit and debit cards continues to fall for the past four years.

As the data indicates, the three LatAm countries that use APMs the most for digital commerce are Colombia, El Salvador and Brazil. In these countries, APMs have reached peaks of 50 per cent, 49 per cent and 44 per cent respectively.

Diversity and digitisation

The region’s rise of APMs can be strongly attributed to increases in digitisation and financial inclusion.

Accordingly, between 2011 and 2021, the share of Latin Americans with a bank account jumped from 39 per cent to 73 per cent. However, only 28 per cent have a credit card. It is here in the gap between these two statistics that APMs have found a unique opportunity.

The fast-growing alternative payments landscape in LatAm is being shaped by diversity and increasing availability. This is clearly evident with account-based transfers, such as Pix in Brazil and PSE in Colombia; e-wallets, such as Ualá in Argentina; cash-based payments, such as OXXO in Mexico; buy now pay later (BNPL) solutions, such as Sistecredito in Colombia, and others.

Source: Americas Market Intelligence (AMI), in Beyond Borders 2022-2023
Source: Americas Market Intelligence (AMI), in Beyond Borders 2022-2023
Alternative payments with real-time confirmation are booming

Among the most common APMs in the region’s digital commerce, account-based transfers have proven to be a real success story.

Accordingly, the most recent analysis from Americas Market Intelligence (AMI) shows that these transfers have been roughly doubling in volume for the last five years, growing at a 86 per cent CAGR since 2018.

LatAm transfers are forecast to top $68billion in volume by the end of this year. Columbia is expected to have the most significant share with 30 per cent of total digital commerce volume. Brazil follows Columbia at 24 per cent, followed by Guatemala at 11 per cent and Chile and Bolivia at 10 per cent each. And by 2025, the total payments volume of account-based transfers is forecast to reach $121billion.

The technology coming out on top

Two major players are recognised for the growing momentum of LatAm’s account-based transfers. Namely, these include Pix in Brazil and PSE in Colombia.

Developed by the Central Bank of Brazil, Pix represents around one-fifth of all online purchases in Brazil made this year. The APM has been used as a global benchmark for other regions seeking fast, safe, trustworthy and instant transactions.

Meanwhile, PSE became the most used payment method in Colombia’s e-commerce sector in 2021, with nearly 35 per cent of all online purchases in the country. PSE even remains ahead of credit cards, which have a 30 per cent share. In 2022, the instant payment created by Colombia’s clearinghouse should reach $9.3billion in total online sales.

Other smaller account-based transfer solutions are starting to gain traction in LatAm’s e-commerce landscape. These include SPEI in Mexico, Sinpe Móvil in Costa Rica, Simple in Bolivia and Pagos al Instante in the Dominican Republic.


Another APM that relies on real-time confirmation becoming increasingly popular in LatAm digital commerce are e-wallets. Usage is expected to grow by about 20 per cent per year through 2025 across the region’s digital-commerce landscape.

This growth is being driven most notably by an uptick in LatAm’s demand for digital services. Within that same timeframe, AMI forecasts e-wallets’ payments volume will surpass $70billion, or approximately a 10 per cent share of LatAm’s entire digital-commerce market.

Argentina and El Salvador are currently leading penetration, having a 23 per cent share of their respective digital-commerce markets being paid with e-wallets. They are followed by their neighbours Bolivia (14 per cent), Peru (13 per cent) and Uruguay (12 per cent).

Likewise, Brazil and Mexico appear to be the least responsive to e-wallets at 11 and eight per cent respectively.

The fast growth of these APMs with real-time confirmation is driven by a change in consumer behaviour. Shoppers have come to expect instantaneous payments and their preferences will not change.

LatAm Alternative Payments
Juliana Etcheverry, director of strategic payments partnerships, EBANX

“Currently, I cannot think of conceiving of a payment method without the instant mindset,” comments Juliana Etcheverry, director of strategic payments partnerships at EBANX.

“Customers expect their payment options to align with their instantaneous way of life. They want the ability to send or receive money right away. Not in a matter of days, but in a matter of minutes or seconds.

“We are drawn to having our needs solved instantly,” concludes Etcheverry.

BNPL is finding its way in LatAm

The EBANX study indicates that another APM that is gaining traction in LatAm is BNPL.

This certainly follows a global trend that forecasts this type of payment may reach $400billion in volume by 2026 worldwide.

Evidence goes on to suggest that the APM continues to gain traction in LatAm. In LatAm’s two largest economies, Brazil and Mexico, BNPL grew 80 and 82 per cent respectively, in 2022. However, neither manages to surpass Colombia’s 208 per cent increase in BNPL services.

Mexico and Colombia have the largest shares of BNPL in Latin America. For online-commerce volume, each achieved $1.2billion and $1.1billion, respectively. Similarly, Brazil reached $1.2billion in sales volume. Yet Brazil represents a smaller share of the total e-commerce volume in the country.

Additionally, EBANX consultants see an opportunity for BNPL in LatAm through understanding the target audience. Consumers who don’t have credit cards or enough credit limit but want to pay for their purchases in instalments.

Furthermore, for Erika Daguani, EBANX VP of product, better experiences will gain traction for BNPL in LatAm. “The key aspect is accessibility; it’s giving credit in an easy way to the right people who are good payers, but have difficulties in proving their scores.”


  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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