Latin America’s ecommerce market is growing rapidly. Figures-wise, it is projected to reach USD 146 billion in 2024, with an estimated CAGR of 20% from 2023 to 2027. Brazil, the region’s largest economy, is expected to become a USD 41 billion ecommerce market in 2024, while Mexico’s market is set to hit USD 38 billion. As this dynamic growth continues, innovative technologies are likely to emerge, driven by consumer demand for greater access to more goods and services.
However, there are a few things to keep in mind. Politics plays a significant role in shaping both innovation and market accessibility. While some outdated regulations still pose challenges, growing openness to foreign investments fosters a more innovative environment in the region. We’re witnessing success, driven by both public and private initiatives, particularly with very inventive ecommerce-first payment options.
Pix is by far the biggest success, dwarfing not only other LATAM real-time payments (RTPs) initiatives but even those in North America, in terms of volume. Fintech startups are introducing new payment methods, issuing cards, and launching digital wallets, as Pix is now a major influence on both providers and consumers. A range of account-to-account (A2A) payments is expanding, increasingly growing into peer-to-business (P2B) payments as well. Looking ahead, interoperability and regulatory developments will be key drivers of this progress.
Merchants are clearly focused on expanding to LATAM, as the region is experiencing rapid growth – 11% CAGR through 2026.
Consumer preferences vary quite a lot by country, depending on factors like bank account, smartphone, and credit card penetration, as well as the available payment options. For example, Brazil has a bank penetration of 97%, with 13% of payments made in cash, while in Mexico bank account penetration is 35%, and 60% of payments are made in cash. Cash is still a predominant payment method, but digital payment methods are on the rise. In ecommerce, credit cards remain the preferred method, however, they are gradually losing ground to local payment methods.
Additionally, merchants need to consider direct and indirect tax implications, as LATAM countries rank highest in the Tax Complexity Index. Regulations across various commerce sectors are constantly evolving and are often influenced by the political landscape and the region’s investment climate.
Understanding the dynamics and consumer preferences of each local market is crucial. To provide an optimised consumer experience, it’s essential to localise your product, aligning with how consumers in that market expect to access and pay for goods within your specific business model. Additionally, you need to carefully consider whether to fully localise or seek assistance from a partner to navigate the nuances of the local market.
Merchants can determine when to localise by analysing local competition, consumer behaviour, and regulatory demands. When identifying a partner, consider their market expertise, technological capabilities, and alignment with your business goals to ensure successful integration and expansion.
Neobanks and digital banks are growing fast across the region, operating differently from traditional, more established banks. They tend to adopt innovative technologies and offer more digital-friendly services, which can impact consumer payment preferences. Fintechs often set themselves apart with products like instant settlements, dynamic currency conversion, and frictionless cross-border payments, which benefit merchants by improving cash flow and reducing transaction costs. To stay competitive, merchants should watch for trends such as Embedded Finance, AI-powered fraud prevention, and Buy Now, Pay Later solutions. Implementing these technologies helps address the complexities of the payment landscape and enhances the customer experience.
The Latin American payments landscape will continue to evolve with the increasing integration of real-time payment systems and digital currencies. The growth of fintechs and the push for financial inclusion are likely to bring more innovative solutions to the forefront, including digital wallets and cryptocurrencies. These trends, combined with a drive to enhance cross-border transactions and reduce friction in the payment process, suggest a future where Latin American consumers and merchants will have access to a more seamless and diverse array of payment options. As regulators and key market players push for greater interoperability and standardisation, the region is on track to become a global payments leader.
This editorial piece was first published in The Paypers' Global Ecommerce Report 2025, which provides a complete overview of key trends and strategies to help businesses worldwide succeed. Download your free copy today to explore in-depth insights on global ecommerce trends, the latest innovations in payment solutions, and strategies to stay ahead in a competitive market.
Therese Hudak is VP of Account Management at PPRO. She joined the company in 2019 and currently oversees partnerships with global merchants, helping them expand their business by optimising local payment methods. With a deep passion for business development, Therese has been a driving force in the payments industry since 2004, holding key roles at companies like Netgiro (now Worldline), Digital River, and PayPal/Braintree.
PPRO provides digital payment solutions to businesses and banks so that they can scale their local payment services through one connection. Our mission is to simplify access to local payment methods, and our vision is to enable the sale of goods and services to anyone in the world using their preferred way to pay. Stripe, PayPal, and J.P. Morgan are some of the names that work with us to eliminate the complexities of local payments.
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