Report: Payments preferences of Latin American consumers

The digitalization of the economy has gained more and more momentum around the world and the Latin American and Caribbean region has not been left behind.

Payments preferences of Latin American consumers

In an ever-changing world, technological innovations are changing the way we interact every day, and this extends to the payments industry, transforming the way everyday payments are made and how people spend or manage their money.

To learn more about the main methods and factors that consumers consider when making a payment, as part of the Mastercard LAC Innovation Forum, Mastercard presented new research that investigates the payment behaviours of consumers in 14 countries in Latin America and the Caribbean.

According to the main findings, over the past few years the use of various alternative payment methods has increased: 77% of the consumers have used electronic payments, with credit and debit being the most utilized payment instrument both online and in-store.

Debit has been highlighted as the most important digital payment method, used by 63% of consumers.

Latin Americans open to payments technology

People in Latin America and the Caribbean continue to demonstrate their openness to testing new payment methods and their adoption of electronic payment methods.

In this regard, cards continue to be the preferred medium and use of alternative digital methods has increased exponentially, while the use of cash has decreased.

The use of cash has been declining in recent years, with a third of consumers indicating that their preference for this option has been displaced by the digitization of payments.

In addition, more than half of consumers surveyed (63%) indicated that they were very comfortable using new technologies.

Key Findings:

• Debit cards are the most used payment method, with a usage rate of 55% and 41% for in-store and online purchases, respectively. Here, Chile is the country with the highest penetration of debit cards, both in-store (82%) and online (72%).
• 50% of consumers indicate that the adoption of electronic payments is motivated by reducing the use of cash. The second reason, with 45%, is due to the speed of the transaction. More than in any other market in the region, 60% of Argentinian users carry less physical money with them.
• While the introduction of new payment methods has increased, consumers prefer digital wallets when making a purchase in a store due to convenience (45%), speed (44%), and accessibility/user experience (44%).
• Two-thirds of consumers use digital wallets for online or in-store transactions. The countries that make the highest use of this type of payment are Argentina and Uruguay, where more than 80% of consumers have used it.
• Digital wallets mainly appeal to young adults, even more so when it comes to making online payments. 44% of consumers between the ages of 18 and 30 cited convenience as the top factor driving their online payment preferences.
• When making a purchase, 44% of consumers use a mobile device to perform a transaction. The country where these devices are most used for payments is Brazil (86%), while in Jamaica it is the opposite, where this type of payment has not been implemented for the most part (13%).

Security: A key factor

Within the payments ecosystem, consumers are looking for frictionless experiences that allow them to make and receive payments easily, quickly, and most importantly, securely.

Security – and specifically the fear of fraud – is the main factor that determines consumer behaviour in relation to the payment methods they use.

In fact, 83% of Latin Americans indicated that security features are the most influential aspect when choosing which payment method to use, followed by the protection of consumer financial information at 79%.

When it comes to thinking about secure payment methods, debit cards take the top spot. According to respondents, debit cards are the payment method they fully trust (36%), followed by bank transfer (34%) and credit cards (27%).

In this case, Uruguayan respondents stand out, who with 67% are the ones who feel the safest when making transactions with their debit cards, while Colombians are the ones who find them less secure (11%).