- Latin America shifting towards digital payments, replacing cash transactions.
- COVID-19 accelerating the adoption of contactless payments among merchants.
- Varying adoption rates across countries, with leaders like Brazil and Argentina.
- Benefits for travelers: increased security, reduced fees, enhanced convenience.
Mexico City, Mexico–Cash may have been king in Latin America for decades, but a growing number of consumers are turning to digital payment options, signaling a major shift in the region’s financial landscape.
Growing Preference for Digital Payments
According to a Skift report, the global trend of ‘going cashless’ has begun to take hold in the region where a large percentage of residents didn’t even have bank accounts just a few years ago. The report states that travelers can now find a wide range of payment options available, from credit and debit cards to mobile payments.
Acceleration Amidst the Pandemic
The COVID-19 pandemic accelerated the shift towards contactless payment methods in Latin America (and other developing countries), spurring the adoption of digital payment options and leading to increased acceptance of digital payments by merchants and service providers.
“Checks in South America have all but vanished. Most payments are online, by phone or debit cards,” said Juergen Keller, the CEO of a Seattle-based travel agency, South America Travel, in the report, adding that ‘contactless’ was now the rule.
Varying Acceptance Across Countries
The report added that travelers to Latin America should expect varying degrees of acceptance of digital payments depending on the country. While Brazil and Argentina have already made significant progress in adopting digital payments, other countries in the region are still catching up.
“With the exception of Cuba, all digital payment methods are becoming more widely available,” said Edward Welham, the customer services manager for UK-based travel agency Journey Latin America in the report.
“Chile was accepting their equivalent of our Oyster card (smart payment card) before us in the UK,” he added.
Digital payments offer a host of benefits for travelers, such as enhanced security and reduced currency exchange fees, in addition to their convenience.
Overall, the trend toward digital payments in Latin America is a positive development for travelers and locals alike. As more merchants and service providers accept digital payments, it will become easier for travelers to navigate the region and enjoy all it offers.
What We Think
The swift transition to digital payments in Latin America signifies a fundamental shift in the financial landscape, providing travelers and locals with convenience, security, and cost-efficiency.
The pandemic accelerated this shift, creating a more widespread acceptance of contactless payment methods. As countries across the region embrace these technologies at varying speeds, the overall trend bodes well for smoother travel experiences and easier access to services.
The future promises even greater ease in navigating the diverse offerings of Latin America.