Cash Share of In-Store Payments Plummets to 25% in Latin America

The region is becoming a nexus for innovation, driven by a combination of burgeoning FinTech companies and government-backed initiatives. According to the PYMNTS Intelligence report “Digital Developments: Charting Digital Payment Growth in Latin America,” this shift is not only revolutionizing how consumers and businesses transact but is also promoting financial inclusion by integrating previously underserved populations into formal financial systems.

Mobile devices, specifically digital wallets and real-time transfer apps, are emerging as the preferred method for payments, reshaping purchasing behavior across the continent. Pay by bank and buy now, pay later (BNPL) solutions are gaining traction alongside digital wallets.

Experts anticipate this momentum will continue, with digital payments projected to capture transaction value in the coming years. Cash use has seen a decline over the past decade, a trend expected to persist as digital alternatives offer convenience and accessibility. While credit cards remain a prominent payment method, they too are ceding ground to the adoption of digital solutions. The landscape is being defined by instant payment systems, which are becoming standard practice, propelled by nationwide governmental projects like Brazil’s Pix and private-sector FinTech innovations such as Modo in Argentina.

Key data points underscore the scale of this transformation:

• By 2030, experts predict that digital payments will represent 66% of online purchase value and 49% of in-store transaction value in Latin America. This is an increase from 48% and 30%, respectively, in 2024.
• Cash’s share of in-store transaction value plummeted from 67% in 2014 to 25% in 2024. This share is expected to fall to 17% by 2030, reflecting a preference among consumers for cashless methods.
• Brazil’s Pix system recorded 64 billion transactions in 2024, marking a 53% year-over-year increase and surpassing the combined total of debit and credit card transactions by 80%. On a single day in December, Pix processed a record 252.1 million transactions.

Beyond these figures, the report highlights several other facets of the region’s digital payment evolution.

Mobile wallets and payment apps have become indispensable tools, with 62% of Latin Americans reportedly using digital means, including mobile wallets, for regular payments. User satisfaction with these digital methods is high in countries like Argentina and Colombia.

Fast payment systems, tied closely to the region’s high mobile phone penetration, are crucial for financial inclusion, empowering small businesses and individuals in areas with limited traditional banking infrastructure and helping lower remittance costs.

FinTechs are experiencing explosive growth, with 3,069 FinTechs operating across 26 countries as of 2024, a jump from previous years. These firms are targeting underserved segments and providing access to financial products previously unavailable, such as QR code payments, peer-to-peer (P2P) transfers and prepaid cards.

Governments have also contributed by implementing pro-FinTech regulations, digitizing subsidy payments, and expanding internet and mobile data access.

Sustaining this trajectory will necessitate continued investment in infrastructure, harmonizing regulations, and fostering public-private collaborations to ensure solutions remain accessible, affordable and interoperable across Latin America.