Fintech Ecosystems Insights South America

Together, LatAm and African Digital Markets to Surpass $1trillion in Total Value by 2026 Finds EBANX

EBANX, the payments solutions provider, has published a study on digital markets and payments in rising economies as it finds both the digital markets of Latin America (LatAm) and Africa are set to surpass $1trillion in total value by 2026.

In its annual Beyond Borders report, EBANX found that while digital commerce is growing by 13 per cent or 12 per cent per year in more consolidated markets around the world, like the US or Europe, online sales are expanding at a much faster pace in rising economies, of 20 per cent, according to Statista‘s data, in the study. Over half of the population in these regions already embraces digital payments, positioning them as central to economic growth and consumer access.

Paula Bellizia, president of global payments at EBANX
Paula Bellizia, president of global payments at EBANX

“There is a solid demographic reason for this: rising economies have a young and growing population, contrasting developed regions. In addition to the demographic and economic push, rising economies largely benefit from digitisation,” states Paula Bellizia, president of global payments at EBANX.

“The digital revolution has been disrupting industries and unlocking opportunities for both local and global players, from verticals spanning from SaaS, digital ads, and B2B online trade, to gaming, streaming, social media, and e-commerce. And payments have been the backbone of this growth,” she added.

Latin America‘s digital market will nearly double in size by 2026, reaching $944billion after growing at a 23 per cent CAGR, per PCMI data for Beyond Borders, showcasing robust opportunities. Brazil, LatAm’s digital commerce powerhouse, boasted a $275billion market last year. It stands out as a prominent force, ranking fourth globally in the number of digital buyers, according to Insider Intelligence.

Booming markets

Also emerging as strong contenders are Mexico, Colombia, and Peru, which display annual growth rates of around 30 per cent for digital commerce. Central America and Caribbean countries like Costa Rica, El Salvador, Panama, Guatemala, and the Dominican Republic will not slow down either. They are set to expand at an annual pace of around 20 per cent by 2026, proving that a block approach to this Latin region can add up to the global expansion strategy of any global digital player.

India is another perfect example of the digital potential in rising economies: the Asian country is the world’s second-largest online shopping market, only behind China, with around 350 million people boosting a digital commerce market that surpassed $184billion last year. And yet, the online sales penetration rate is still at 33 per cent, as pointed out by Insider Intelligence’s data in Beyond Borders, showing the substantial untapped opportunity still in the country – particularly if efforts are directed towards improving payment access for India’s diverse population.

Financial inclusion was at the centre of two strong cases inspiring the world: UPI in India and Pix in Brazil. With great user experience, zero-cost services to consumers and minimal to no charges for merchants, the two systems are revolutionizing both offline and online purchases: Pix is part of the daily lives of four in every five adults in Brazil, according to the country’s Central Bank.

Over the last three years, nearly eight out of 10 customers making their initial online purchase with an EBANX merchant opted to use Pix for payment, per EBANX internal data. In India, UPI has a 41 per cent share of the total digital commerce, according to PCMI, being the utmost chosen payment method by Indian online consumers.

Digital potential

As an early adopter of digital payments, and soon to be home to an adult population of one billion by 2030, Africa is also an important region for the outstanding digital growth of commerce and payments. Africa heavily embraced digital payments causing a jump from a 23 per cent to a 46 per cent penetration rate in many of its countries in less than eight years.

Now it is on the verge of its next big leap: digital commerce, fueled by cellphone penetration rates and constant adaptability of local, alternative payment methods to the online world. For example, mobile money, which reached almost universal penetration in countries like Kenya.

It is interesting to observe how the innovation brought by alternative payments is improving the whole ecosystem, and impacting cards as well – including debit ones – which remain steady and keep playing an important role in the digital economy as account ownership surges in rising markets. “Cards
and alternatives are learning from one another, absorbing features from one another, paying attention to the needs of merchants and consumers,” Bellizia noted.

Combined, credit and debit cards represent 51 per cent of digital commerce value in Brazil, 66 per cent in Mexico, and 75 per cent in Chile. In India, cards account for 43 per cent of the value of online transactions; and the high penetration goes to African nations as well. In Morocco, 42 per cent; in Nigeria, 36 per cent.

“A payments strategy for rising markets needs to consider a balance between cards and alternative payments, adapted to specific countries, verticals, and business models, centered in offering the best payment experience to customers, enabling them to pay with their method of choice. This fosters true access,” she added.

Next frontier for innovation and growth in payments

The new Beyond Borders report is revealing the next frontier for innovation and growth in the payments industry: B2B payments – companies purchasing from other companies. Currently, 42 per cent of Kenyan businesses and 63 per cent of Indian ones make online purchases. In LatAm, 64 per cent of businesses in Brazil and an impressive 85 per cent in Colombia, way higher than the global average of 50 per cent, according to OECD and UNCTAD data.

By 2027, rising markets in LatAm, Africa and APAC will make up for 40 per cent of the total value of B2B payments made online worldwide. However, an estimated 70 per cent of B2B transactions are still pretty much manual, according to Capgemini, lacking more seamless flows.

“This opens a massive opportunity in which alternative payments can be a game-changer: EBANX’s internal data show that local payments improve approval rates for B2B transactions, with internal rates that surpass 80 per cent” Paula Bellizia concluded.


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