This rise in APMs follows four years of upward growth since 2018, while credit and debit cards have seen their shares shrink.
The three Latin American countries that use APMs the most for digital commerce are Colombia, El Salvador, and Brazil, where APMs have already reached peaks of 50%, 49%, and 44%, respectively.
The rise of APMs in the region is a result of an increase in digitisation and financial inclusion. The share of Latin Americans who have an account has jumped from 39% to 73% between 2011 and 2021, according to the World Bank's Global Findex, while only 28% of people in LatAm have a credit card. It is within this gap between accounts and card ownership that APMs have found a unique growth opportunity.
The alternative payments landscape in Latin America is shaped by diversity, with account-based transfers, such as Pix in Brazil and PSE in Colombia; e-wallets, such as Ualá in Argentina; cash-based payments, such as OXXO in Mexico; Buy Now, Pay Later (BNPL) solutions, such as Sistecredito in Colombia, and others.
Among the APMs most commonly used in digital commerce across LatAm, account-based transfers have proven to be a real phenomenon. By the end of 2022, they should reach USD 68 billion in volume in Latin America, with the most significant shares in Colombia (30% of the country's total volume of digital commerce), followed by Brazil (24%), Guatemala (11%), Chile and Bolívia (10% both).
In Latin America, this growing momentum for account-based transfers is being pushed by two major players: Pix in Brazil and PSE in Colombia. Developed by the Central Bank of Brazil, Pix is expected to represent more than 20% of all online purchases in Brazil in 2022. Meanwhile, PSE became the most used payment method in Colombia’s ecommerce sector in 2021, with nearly 35% of all online purchases in the country – ahead of credit cards, which had a 30% share.
Other smaller account-based transfers' solutions are starting to gain traction in LatAm’s ecommerce landscape, such as SPEI in Mexico, Sinpe Móvil in Costa Rica, Simple in Bolivia, and Pagos al Instante in Dominican Republic.
The new Beyond Borders 2022/2023 study shows that another alternative payment that is gaining traction in Latin America BNPL, following a global trend that forecasts this type of payment may reach USD 400 billion in volume by 2026 worldwide.
Although BNPL still has a low penetration in the overall volume of Latin American digital commerce, in the region's two largest economies, Brazil and Mexico, this credit offering grew by a significant 80% and 82%, respectively, in 2022; while in Colombia, it rose by an impressive 208%. Mexico and Colombia have the largest shares of BNPL in Latin America, with USD 1.2 billion and USD 1.1 billion in online-commerce volume.
Experts consulted during the development of EBANX's latest Beyond Borders study said the opportunity for BNPL in Latin America lies in understanding who its target audience is: consumers who do not have credit cards or enough credit limit but want to pay for their purchases in installments.
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