Consumer payment preferences in Latin America have shifted significantly since 2019, with electronic transfers challenging cash and card usage. Real-time payments (RTPs), which enable instant electronic transfers from different bank accounts, have emerged, reducing fees and increasing accessibility to new digital payment methods for both consumers and merchants in the region.
In Brazil, the government-led Pix system revolutionised RTP adoption, offering free-of-charge and immediate transactions across different banks, being followed by other governments in the region. We discuss the current payments landscape in Latin America and what is ahead for RTPs in the region, including the role governments will play in boosting payment options.
Initiated by digital wallets, payments are in a new momentum with RTPs
Digital wallets were one of the first payment options in the region that challenged both physical cards and cash.
60% of consumers in Latin America use smartphone-enabled payments at least once a month for in-person transactions in 2024
Source: Euromonitor’s Voice of the Consumer: Digital Survey, fielded in March and April 2024
The smoother payment experience and the possibility of bringing unbanked individuals into the financial system are two of the main benefits of digital wallets. Despite this, more than a quarter of surveyed consumers do not use or are not aware of such solutions, which shows opportunity for digital wallets to grow among a wider audience.
Under this new payments landscape, RTPs came as an evolution of digital wallets, standing out due to reduced/non-operational fees and a consumer experience similar to card transactions. In addition, informal merchants, which are very common in Latin America, can now reach consumers with in-person digital payment options, beyond traditional cash. In Colombia, for example, leading banks Bancolombia and Daviplata launched digital wallets Nequi and Daviplata, respectively, to address the RTP transformation. In Brazil, digital banks, such as Nubank and Picpay, started this trend in the 2010s, but it was the government’s Pix that pushed forward the RTP transformation in the country since the end of 2020.
Main RTP Platforms per Selected Countries in Latin America:
- Government-led RTP countries
- Brazil: Pix
- Mexico: SPEI-CoDi
- Private-led RTP countries (digital wallets)
- Argentina: Mercado Pago
- Chile: Mercado Pago and Onepay
- Colombia: Daviplata and Nequi
- Peru: Yape and Plin
Source: Euromonitor International from public sources
Pix changes the norm, putting governments at the centre of digital transformation
Although Pix has been operating for almost four years, as of June 2024, Brazil’s government-led RTP is still growing at a double-digit pace in terms of personal transactions, gaining space from other payment types.
Pix has grown 66% annually since mid-2022 in terms of personal transactions volume
Source: Central Bank of Brazil
Due to its regulation, Pix is fee-free for persons, making it suitable not only for personal transactions, but also for daily purchases. Secondly, and more importantly, the system is also mandatory to be free and accessible in an interbank way, enabling free transactions for consumers, independently of their serving banks on both ends. Pix’s governance enables it to reach more consumers compared to private-led RTPs from digital wallets, which are generally not free of charge for interbank transactions.
Both RTP types are managing to make electronic transfers grow, digitalising transactions while cash drops. However, as government-enabled RTPs strive for bank interoperability, these solutions manage to have RTPs growing faster and reaching more consumers. In Brazil and Mexico (government-led RTP countries), electronic transfers have grown more annually (81%) in terms of transaction quantity from 2021 to 2023 compared to other countries in Latin America (48%). RTPs with bank interoperability can have more of an impact to the payments landscape in each country, reducing cash usage.
Brazil’s example is generating a wave of government-led RTPs in Latin America
The success of Pix has led other countries to discuss new government initiatives to push RTPs, but developments are at different stages:
- Argentina: Although Banco Central de la República Argentina launched Transferencias 3.0 in late 2021, the RTP solution has not reached full bank interoperability in 2024. Mercado Pago, Argentina’s main digital wallet, is not part of the ecosystem yet, as commercial agreements are still under discussion.
- Chile: Banco Central de Chile is planning to develop a solution in its 2023-2027 strategic plan.
- Colombia: Banco de la República acquired a solution from ACI Worldwide to provide bank interoperability to RTPs in 2025.
- Peru: Banco Central de Reserva mandated interoperability between digital wallets in March 2023, gradually. First, the interoperability started between the two main RTP systems, Yape and Plin, while Peru’s interoperability across all systems is set to be implemented during 2024.
These examples reinforce the pivotal role of government and its central banks on RTPs’ interoperability and fees, widening consumer access and adoption. In the coming years, Latin America’s payments landscape is expected to be more impacted by RTPs, bringing new consumers to digital payment methods and reducing cash usage in most of the region’s countries.
As a consequence, card operators will need to adjust to this new scenario, with more digital payment options competing to capture cash users. Wider reward programmes, enhanced safety measures and smoother shopping processes are some features that will be key to keep affluent consumers using cards, although, to reach underbanked consumers, cards will need to propose innovative products to compete with free-of-charge RTPs.
Read our report, Financial Cards and Payments in Latin America, for in-depth analysis of the regional landscape and trends in payment types.