Conversely, there are 374 million open credit card accounts in the United States (in a population of about 325 million), and card transactions account for about half of all payments in the European Union. A 2019 survey conducted by EBANX showed that 79% of Latin American consumers prefer to pay with installments for products valued at $50 or more (which would include most airline tickets). In fact, Latin Americans are as comfortable with making installment payments at the point of sale as North Americans and Europeans are using credit cards. Installment payments (making regular payments over a set period of months) are common across Latin America – over 60% of ecommerce is currently transacted via installments, with Brazil’s ecommerce installment rate as high as 80%. Installment Payments are the Norm, Not the Exception Cash payment options in Latin America include:
71% of Brazilians report using cash as the " main means for paying for their daily lives." There are a number of mobile money services that allow Latin Americans to shop online and pay for their purchases in cash at authorized locations.Īirlines that offer cash payment options on their websites and mobile apps are not just making it easier to travel but demonstrating their commitment to the Latin American region and its individual countries, where cash is a daily fact of life. 85% of transactions in Latin America are cash-based and only 39% of the population has a bank account. So how should airlines and other travel merchants factor APMs into their payment strategies? Should airlines and travel merchants focus on integrating specific APMs that are relevant only to the locales they serve? Or should they take a more flexible approach that gives them access to dozens of APMs favored by traveler segments from different Latin American countries – all through a single Payment Orchestration platform?Īs airlines and other travel merchants assess their payment strategies in the region, it's worth revisiting the different payment options currently available to Latin America’s consumers and emerging travel sector.įrom the Baja peninsula in Mexico to the Tierra del Fuego archipelago in Chile, the southernmost territory in Latin America, cash is still popular for a number of reasons – lack of banking infrastructure, lack of access to credit, and a mistrust in financial institutions. Some APMs such as PayPal (operating locally in Mexico and Brazil) remain popular across multiple Latin American countries, while some, like Brazilian boletos, are strictly domestic. Online card payments in Chile, for example, more than doubled at the end of March 2020 compared to the same period the year before. Owing to the necessity of online payments and digital, contactless transactions, 55% of consumers in the region now have a bank account. The impacts of that crisis in Latin America were severe, and it accelerated many trends in the payments space.
Of course, there was one major disruption that occurred since our last report – the coronavirus pandemic. Local mobile payment players in Latin America include: PayPal (operating locally in Mexico and Brazil).Stored value wallets - “top up” their mobile money accounts.eCommerce wallets such as Visa Checkout or Amazon Cash.Contactless mobile wallets such as Apple Pay.In fact, the number of APMs available to Latin American consumers has only increased. Latin Americans continue to use many different alternative payment methods (APMs) – from bank transfers and cash vouchers to installments, local/regional credit cards and full-functioning mobile wallets such as Apple Pay (which is slated to launch in Mexico in early 2021). In the past two years, this has not changed. When we last wrote about the alternative payments landscape in Latin America, we began by likening the region's rich tapestry of local dialects to the variety of payment methods used from country to country. Editor's note: This blog post was originally published in 2018, but was updated for comprehensiveness in December 2020.
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