Introduction

Although Latin America does not have the largest e-commerce market, valued at only 200 billion, it is certainly an interesting market to explore. In fact, according to the EBANX study, LATAM is the second fastest-growing e-commerce market in the world, surpassed only by the Asia-Pacific region. Therefore, it presents a huge growth opportunity for forward-looking businesses and makes for an interesting territory to explore in our “Most Popular Payment Methods” series. 

Brazil

The region’s largest e-commerce market is Brazil, accounting for almost one third (32.5%) of all e-commerce in the LATAM region. Brazil’s e-commerce has been expanding rapidly as COVID-19 pandemic increased the number of online shoppers by 25% in 2020. Thus, presenting an exciting opportunity for international merchants looking to enter the LATAM region. 

Regarding payment methods, credit cards and cash dominate the market respectively accounting for 59% and 19% of all online transactions. For cards, the usual suspects, Visa and Mastercard, are also accompanied with local cards such as Elo, HiperCard and Aura. 

As mentioned, cash is the second most popular payment method for e-commerce in Brazil, where Boleto Bancário dominantes. This cash-based payment method is regulated by the Central Bank of Brazil and allows shoppers to pay for online purchases with cash at banks, ATMs or other authorized locations such as drugstores or post offices. In fact, the word “Boleto” literally means “ticket”, an apt name considering its popularity among the masses. This popularity can be easily explained by the large proportion, 35% of the population being unbanked. It is now also possible to pay the voucher online on a banking app. 

Another new and important addition to the payment sector of Brazil is the launch of PIX. In November of 2020, this instant payment system was introduced by the Brazilian Central Bank to allow round-the-clock payments. This enabled transactions to take place from one ewallet to another in real-time (hence referred to as “instant” payments”). A study carried out by BS2 Bank across Brazil found that 73% of the consumers polled intend to use PIX as a payment method. So though PIX is relatively new in the market, we expect to see a rise in its popularity across the country making it relevant to merchants wishing to enter the Brazilian market. 

Finally, Digital wallets are the third most-used payment method, making up 14% of all transactions. This percentage is expected to increase in the future due to higher smartphone penetration. Here, the most popular wallets are Mercado Pago, PayPal and PicPay. Another important thing to know about digital payments in Brazil is that more than 60% of all e-commerce payments are made in installments.

Mexico

Argentina

Conclusion

Clearly, LATAM  is an interesting region to explore for international merchants with growth and expansion ambitions. After all, e-commerce is flourishing in all the countries we explored with most markets growing at double-digit rates. As we all know by now, it is important to keep in mind the most popular LATAM payment methods when entering these countries in order to attract local shoppers. 

While the payment habits are quite similar across all countries; cards, cash-based payment methods and installments are still widely adopted with each country still presenting many significant differences. Every country has its own domestic options both for cards and cash payments: while Brazilians pay with Boleto Bancário, Mexicans use Oxxo, Argentinians prefer RapiPago and PagoFacil and lastly Columbians have several alternatives

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