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1、Opportunities for businesses in 2023 and beyond.Navigating cross-border payments in Latin America2Table of contents Introduction Overview of digital payments in Latin America(LATAM)-Key facts-Financial inclusion is on the rise LATAM at a glance-Preferred payment methods-Common payment methods and em
2、erging trends-Key payment changes after 2020 Real-time payments solution in LATAM Mobile money:Leading alternative payments The changing regulatory landscape-Current and pending fintech regulation-Payments incumbent Key countries in focus-Brazil-Mexico-Colombia-Chile-Argentina-Peru-Costa Rica Indust
3、ry challenges and barriers to payment adoption-Unbanked population across key LATAM countries Future payment methods:crypto and beyond-Crypto ownership by country-Non-crypto owners who planned to buy in 2022-Latin American residents who think crypto is the future of money Conclusion 3466779910121315
4、272727283Introduction Over the past few years,Latin America(LATAM)has been making headlines with its focus on increased digitization.The changing habits brought about by the pandemic have created an environment fueling significant growth and development.However,for businesses l
5、ooking to access the market,it remains more challenging than in other parts of the world.While there are trends that hold across the region,each country has significant variations in payment types and the factors that surround them.Meanwhile,infrastructure and the levels of adoption of both broader
6、technologies and digital payments vary significantly.A payments solution that works in one country may be completely inappropriate in another,depending on factors such as the size of the unbanked population,and the level of both smartphone and internet penetration.This report is designed to shine a
7、light on the region,highlighting the commonalities and trends within payments today and in the future,aswell as identifying the nuances of some of LATAMs biggest markets.4Overview of digital payments in Latin AmericaThe Latin American payments industry is going through a significant period of transf
8、ormation.Advances in infrastructure,as well as rapid digitization,have resulted in profound changes in how individuals and businesses access and utilize payments in the regionboth domestically and cross-border.Prior to 2020,cash was by far the most common means of payment,with almost half of the res
9、idents in the region having no access to a bank account.While cash remains key,widespread initiatives to transition to digital payments is significantly diversifying the payments landscape.This,in turn,is increasing financial access for many of LATAMs residents.Across the region,internet use has inc
10、reased,with three out of four people having some form of access in 2021,compared to just a third ten years earlier.Smartphone access has similarly been on the rise:according to GSMA,it reached 72%in 2020 and is expected to climb to 81%by 2025.Across the region 3 out of 4people have some form of inte
11、rnet access in 2021.5The rise of smartphone accessSmartphone access across the region is expected to climb to 81%by 2025.2020202572%81%This uptick is driving an increase in digital payment options,both online and offline.At the same time,trust in and adoption of e-commerce is also rising significant
12、ly.Inclusion still remains uneven in some parts of LATAM,with different countries seeing notably different levels of access to digital financial services.As a result,excluding high-income residents,only 33%of adults in Latin America and the Caribbean used a phone or the internet to make payments,pur
13、chases,or money transfers in 2021.Nevertheless,growth has been significant,and far more is expected in the future,creating a rich opportunity for payment companies,both local and international.LATAM has been a strong focus for investment in fintech companies over the past few years,with Crunchbase e
14、stimating that a total of$23B has been raised by fintech startups based in the regionsixteen billion of which has been raised since the start of 2021.LATAM also now has numerous payments unicorns,the majority of which were founded in the last decade.The growing payments market has not been exclusive
15、ly capitalized on by local companies.International payments and financial services players have increasingly expanded into the region,either through the establishment of local operations,acquisitions of LATAM companies,or partnerships with third-party companies with a presence in the area.These effo
16、rts have mainly focused on the bigger markets such as Brazil and Mexico,although interest in LATAMs smaller economies is growing steadily.For companies looking to access Latin America,now is a time of rich opportunities.Payments have evolved rapidly,making digital options far stronger than they were
17、 even a year or two ago,yet still leaving considerable room for growth over the next decade.“There were upsides from the pandemic in the sense of digitizationcompanies with projects that had a roadmap of ten years were completed in two.Additionally,we also saw a permanent shift in the payments lands
18、capethose who previously were not digitally savvy and were quite reluctant to use digital payments are now adopting it.I have also seen a huge improvement in financial inclusion,although there is still room for improvement.-Christina Hutchinson,V.P.,Head of Sales and Business Development LATAM,Nium6
19、LATAM digital paymentsKey factsSources:World Bank(2021)includes Caribbean World Bank(2021),covers Latin America and the CaribbeanGSMA(2020)Statista(2019)Financial inclusion is on the rise in Latin AmericaPercentage of individuals with a financial institution account over time:201139%201451%201754%20
20、2171%$14TValue of paymenttransactions$0.2T Payment industryrevenue75%Individuals with internet access56%Individuals who own a debit or credit card 72%Smartphonepenetration 23%Individuals who have a mobile money account$105BPersonal remittance received$10BPersonal remittance sent42%Individuals who ha
21、ve received a digital payment 58%Individuals who have made a digital payment 7LATAM at a glanceAlthough there are significant differences between individual countries in Latin America,there are also commonalities found across the region.In broad terms,LATAM is an area experiencing significant transf
22、ormation in terms of payments.The range of available payment methods has expanded vastly in LATAM over the past few years,with individual countries adopting initiatives that have helped encourage digitization.Cash remains dominant across much of the region,but there is also a wide range of payment t
23、ypes gaining support and seeing growing adoption.Cards are the leading form of digital payment,with credit cards being preferred over debit cards in many areas.This can include installment paymentssometimes known as Buy Now Pay Later(BNPL)which are commonplace in the region across a number of paymen
24、t types.In some parts of the region,bank transfer-based solutions have become increasingly popular as a result of a variety of payment solutions developed by key countries central banks.However,digital wallets are also seeing increased support.Crucially,solutions developed to provide a bridge from c
25、ash to digital without the need for a bank account have also seen growth.These include vouchers that can be purchased at physical stores to make payments online,as well as(to a lesser extent)prepaid cards that customers Preferred payment methodsand growing trends can purchase with cash in order to m
26、ake digital payments.This rise in the range of digital payments has been accompanied and,at times,driven by changes in consumer behavior.Online shopping,for example,has seen tremendous increase over the past few years and is currently the second fastest-growing market globally.Additionally,this has
27、inevitably been accompanied by developments in logistics as providers look to deliver products to their customers more efficiently.Simultaneously,smartphone adoption has grown significantly,with many using these devices as their primary form of digital connection.As a result,mobile-first access to d
28、igital payments has been a particular factor in the development of the payments sector.There has also been a broader push towards open banking in the region,led by the Central Bank of Brazil,which has resulted in greater transparency in some payment services.In all cases,the growth of these trends i
29、s not yet plateauing,meaning that we can expect greater developments in the future.8Common payment methods in LATAMCashCredit cardsDebit cardsElectronic funds/bank transferBuy Now,Pay Later(BNPL)and other card-based installment paymentsMobile walletsVoucher-based paymentsPrepaid cardsPeople made a d
30、igital in-store payment for the first time People made a digital payment for an e-commerce purchase for the first timePeople made a utility payment using an account for the first time Source:World Bank(2021)includes the Caribbean Source:Company announcements/FXC Intelligence analysis.Key payment cha
31、nges after 20201 in 81 in 81 in 259Real-time payments are by no means universal in Latin America;however,they are gaining ground,not least of all in Brazil.In 2020,the Central Bank of Brazil launched PIXits real-time payment system.Despite only having been live for a short period of time,it has beco
32、me a key model for real-time payments in the region.Providing account-to-account payments that are instant and available 24/7,PIX is widespread and highly successful.Around 800 payment service providers in Brazil supported it as of April 2022the majority in the countryand it can be used in physical
33、retail environments by scanning a QR code.In late 2021,the central bank reported that 72%of all transactions in the country were made using PIX,while 62%of the population was connected to the system.This has made it a ubiquitous means of payment in Brazil,regardless of time,transaction size,the peop
34、le or organizations involvedand other capabilities have been added to further its utility.One of PIXs key capabilities is the ability to split payments into installments,a common way to pay in LATAM.Meanwhile,Guaranteed PIX allows payments and transfers to be scheduled in advance.Other capabilities
35、in the works include the ability to complete transactions offline and schedule recurring bill payments.In other parts of Latin America,similar real-time payment systems are gaining ground,although none have been quite as successful.Mexicos CoDi initially saw slow growth and struggled with poor brand
36、 recognition.However,adoption has since climbed,with around 11%of the population using the service.Elsewhere,similar initiatives have largely been led by the private sector,most notably Perus Yape and Colombias Transfiya.Neither has approached the penetration levels of PIX,although Yapes recent remo
37、val of the need to have a bank account to sign up is likely to have helped increase adoption in a country where a high percentage of residents are unbanked.In all cases,current real-time payment systems remain largely domestic,with little capability to use them for cross-border transactions.There is
38、 undoubtedly interest in changing this,with the Central Bank of Brazil in particular identifying this as a future capability for PIX;however,achieving this is extremely challenging.In the cases where systems exist,there may be a move to add interoperability.In other LATAM countries,real-time service
39、s will need to be implemented for the first timeeither through entirely new projects or the extensions of existing onesbefore they can be connected.of all 2021 transactions inBrazil were made using PIX.72%Real-time payments in Latin America 10Major real-time payments solutionsMexicoSolution:CoDiYear
40、 launched:2019Organization responsible:Banco de Mxico Number of consumer customers:14 MillionSolution:PIXYear launched:2020Organization responsible:Banco Central do BrasilNumber of business customers:10 Million Number of consumer customers:119 MillionSolution:TransfiyaYear launched:2020Organization
41、responsible:Minka and ACH Colombia Number of consumer customers:3.8 MillionSolution:YapeYear launched:2017Organization responsible:Banco de Crdito del PerNumber of business customers:1.7 Million Number of consumer customers:10.9 MillionColombiaBrazilPeruMobile money usage over time in LATAMUnbanked
42、population across key LATAM countries Source:World Bank(2021)Brazil16%Colombia44%Peru44%Chile13%Argentina34%Costa Rica31%Source:GSMA(2021).Covers Latin America and the Caribbean.11While cards are the most common form of digital payment in LATAM,digital wallets and other forms of mobile money are gai
43、ning popularity.As one of the leading forms of alternative payments alongside PIX and vouchers,mobile money solutions have steadily gained ground as smartphone adoption continues to climb.These,too,typically provide real-time payments.Still,crucially they also provide an alternative means to store,s
44、end and spend money digitally for the significant percentage of people in the region that are still unbanked or underbanked.Within Latin America,there are large numbers of companies offering mobile money products,with some offering digital wallets across several countries.In contrast,others speciali
45、ze in catering to the financial needs of a specific nation.Moreover,these types of products are also favored by freelance and gig workers due to their flexibility compared to traditional banking products.This continues to be a key driver given the number of people who engage in this type of work in
46、LATAM.According to the World Bank,the percentage of people in Latin America and the Caribbean who are self-employed has grown consistently since 2014,following a period of decline.As of 2019,38%of the population in the region was self-employed,with some areas being considerably higher.Colombia,for e
47、xample,has a rate of 50%,while Peru is at 56%,making these strong potential mobile money markets.Such digital payments solutions provide benefits for consumers,but they also have strong utility for SMEs.Offering increased speed and efficiency over cash,they not only can reduce operational costs asso
48、ciated with payments for businesses but also increase transparency.Businesses making and receiving payments can have a clearer overview of transactions,allowing them to quickly identify any issues and avoid potential waste.“Digital wallets enable you to keep track of your payments on devices like yo
49、ur phone or tablet.You have the flexibility on when and how you want to withdraw your money in real-time.It has been highly adopted,and you have a good set of wallets within the region.I have seen more and more freelancers who prefer to use digital wallets rather than get paid within the bank.-Chris
50、tina Hutchinson,V.P.,Head of Sales and Business Development LATAM,NiumMobile money:Leadingalternative payments 12The emergence of fintechs across Latin America has necessitated an important regulatory response,as new technologies have enabled financial products and services not adequately covered by
51、 existing laws.Here,regulators have faced the age-old challenge of balancing consumer protection with innovation,and inevitably,there has been a fair amount of variation across the region in terms of how the issue is being tackled.In broad terms,regulators in the region have worked to strike a balan
52、ce,providing responses to the emerging fintech space relatively quickly that allow innovation to continue while ensuring consumers remain supported.Mexico has been one of the early leaders in the region in this respect,with the Law to Regulate Financial Technology Institutions,better known as the Fi
53、ntech Law,being enacted in March 2018.Designed to tackle shortfalls in the countrys traditional banking legislation,this required all fintechs to be licensed and to publish extensive regular financial reports on their website.It also created specific restrictions for e-money institutions,including l
54、imits on transaction amounts,and a mandate to communicate that any money held or transacted would not be protected by the government.Not all countries in Latin America have such protections.For example,a similar Fintech Law was only passed in Chile in late 2022.Once enacted,it will provide a regulat
55、ory framework for financial service providers that are designed to balance increased security with support for innovation.Others,such as Colombia,do not have a specific law for fintechs but instead have updated existing laws to cover various aspects of the space.Brazil has arguably been the leading
56、presence in the space,setting the pace The changing regulatory landscape 13and tone of regulation in the region.It saw its first such legislation come into force in 2013,which gave the Brazilian Monetary Council and Brazil Central Bank the authority to regulate the payments industry.Since then,there
57、 have been numerous laws updating aspects of the industry,focused on responding to fintechs changing technological and business capabilities.It has also enacted a number of regulations aimed at specifically improving the payments landscape,including through open banking,which has regulatory support
58、in Colombia and Mexico as well.Many countries have extended regulations to support increased innovation in the fintech space,with several countries establishing innovation hubs for the sector designed to enable fledgling companies to develop with backing from the government or business.Quite a few h
59、ave also established regulatory sandboxes,where regulation surrounding more emerging areas of the industry can be explored without stifling innovation.In some cases,regulators have worked with leading fintechs to explore how best to enact regulations while enabling innovation to flourish.There is no
60、table variation across the region in terms of the level of regulation,with far stronger regulatory frameworks in place in regions where fintech is more developed.There are also a wide variety of regulations in development,with further change almost certain within the next few years as the market evo
61、lves and matures.14Latin Americas regulatory landscape:current and pending fintech regulationRegulatory focusCountries with laws or regulations in placeRegulatory sandbox Barbados,Brazil,Colombia,Jamaica,Mexico,Peru,Trinidad and TobagoCountries with laws,regulations or projects in developmentCrypto
62、assetsBahamas,El Salvador,Mexico,Venezuela Argentina,Brazil,Chile,Colombia,Nicaragua,Panama,Paraguay,PeruCrowdfundingArgentina,Brazil,Colombia,Ecuador,Mexico,Peru,Uruguay Bahamas,Chile,Dominican Republic,Panama,ParaguayOpen financeBrazil,Colombia,MexicoChile,Peru,VenezuelaTrading and Robo-advisorsBr
63、azil,Colombia,MexicoChileFast retail payment systems Argentina,Brazil,Costa Rica,El Salvador,Mexico Chile,Colombia,Dominican Republic,Ecuador,Guyana,Honduras,Jamaica,Nicaragua,Panama,Peru,Trinidad and Tobago,Uruguay,VenezuelaInnovation hubArgentina,Bahamas,Brazil,Colombia,Costa Rica,Dominican Republ
64、ic,El Salvador,Guatemala HondurasSource:Inter-American Development Bank(2022)15The emergence of LATAM as a key area for payments has prompted considerable market moves both from companies native to the region and international players keen to capitalize on its market potential.Home-grown fintechs ro
65、se to over 2,400 as of 2021,25%of which were operating in the payments and remittances space,according to Statista.25%of home-grown fintechsoperate in the paymentsand remittance spaceInternational payments incumbents have also increasingly been taking steps to expand their footprint in Latin America
66、.The exact approach varies by company but typically falls into three categories:direct organic expansion,acquisition,or partnership.Direct organic expansion.This is the traditional approach to any new market where a company establishes a local presence and engages in marketing and other product effo
67、rts to gain a customer base in that region.This has historically been the favored way to enter markets globally by international incumbents,and certainly,there are many companies operating in LATAM that took this approach.However,increasingly incumbents are establishing or increasing their presence
68、in local markets with more help from established local companies.Acquisition.Acquisitions have been a popular approach for a number of companies entering LATAM.Mastercard,for example,acquired Mexicos Arcus in 2021,enabling it to roll out its Bill Pay products to key markets in the region.Similarly,P
69、PRO acquired payment gateway,allpago,in 2019,allowing it to expand its capabilities to Latin America.Partnerships.Partnerships have also become a popular way for companies to establish a foothold in LATAM or to increase their capabilities in key markets within the region.This approach echoes a wider
70、 industry trend towards so-called“co-opetition”,where companies that would otherwise be competitors engage in partnerships in certain markets.The trend shows no signs of stopping,with new initiatives announced every month.The partnership approach also extends beyond payment companies and other finte
71、chs.The rise of embedded finance both internationally and in the region has seen the establishment of growing numbers of companies with payments seamlessly built into wider services.In the majority of cases,the payments part of the service will be handled through a third-party provider,often via a w
72、hitelabel service or similar,but will be unseen to the consumer.Major companies use embedded finance to streamline payments for their customers.Still,as they expand to LATAM they have sought to partner with local companies to provide localized payment solutions.For example,Uber first launched in LAT
73、AM in 2013,yet as of 2020 it accepts payments in Brazil using PIX through a partnership with Ebanx.As more companies expand,there are greater opportunities for payments providers in LATAM that can provide under-the-hood payments processing localized to the regions specific markets.Payments incumbent
74、sand the LATAM market 16Key statisticsPreferred payment types among Brazilian residentsPopulation size217 MillionSource:World Factbook(2022)GDP$1.61TSource:World Bank(2021)Percentage of the adultpopulation with an accountat a financial institution84%Source:World Bank(2021)Percentage of the populatio
75、nwith internet access81%Source:World Bank(2020)Percentage of the populationwith a smartphone 84%Source:GSMA(2020)E-commerce revenue$47.3BSource:Statista(2022)Personal remittances received$3.57B Source:World Bank(2020)Personal remittances sent$1.6BSource:FXC Intelligence(2021)Export value$239BSource:
76、World Factbook(2020)Import value$227BSource:World Factbook(2020)Traditionally a cash-led country,Brazil saw evident adoption of digital payments during the pandemic.This has been primarily driven by the 2020 launch of PIX,the instant payment system operated by the Central Bank of Brazil.The country
77、is also a regional leader in open banking and launched its Open Finance project in March 2022.This builds on earlier open banking initiatives to incorporate wider data,including accreditation,foreign exchange,and investments.Cash remains dominant in the country,and relatively high levels of unbanked
78、 and underbanked residents mean there are some barriers to digital payments adoption.BrazilSource:CNDL/SPC Brasil(2021)Source:World Factbook(2020)Median age33.217Population size129 MillionSource:World Factbook(2022)Source:World Factbook(2020)Median age29.3GDP$1.29TSource:World Bank(2021)Percentage o
79、f the population with internet access72%Source:World Bank(2020)Percentage of the population with a smartphone 67%Source:GSMA(2020)E-commerce revenue$45.7BSource:Statista(2022)Personal remittances received$54.1B Source:FXC Intelligence(2021)Personal remittances sent$1.2BSource:FXC Intelligence(2021)E
80、xport value$435BSource:World Factbook(2020)Import value$411BSource:World Factbook(2020)While cash remains dominant in Mexico,the country is seeing growing e-commerce penetration.A young,smartphone-based population is also helping to drive the adoption of mobile wallet payments.In addition,government
81、 investment in internet infrastructure has helped to aid ongoing digitization.The countrys proximity to the U.S.also has significant impacts on its trade,and the U.S.-Mexico corridor sees the highestflows of consumer remittances globally.MexicoSource:Statista(2021)Share of payment types atpoint-of-s
82、ale in MexicoKey statistics18Cash remains dominant in Colombia,with a significant minority of e-commerce purchases made using cash.It remains the leading payment type for in-person purchases.Domestic credit cards are popular and often offer installment-based payments,which are widely favored in the
83、country.Bank account-based payment service Pagos Seguros en linea(PSE)is widespread.Colombia49 MillionPopulation sizeSource:World Factbook(2022)$314BSource:World Factbook(2021)Median age31.2GDPSource:World Bank(2020)56%Percentage of the adultpopulation with an accountat a financial institutionSource
84、:World Bank(2021)70%Percentage of the populationwith internet accessSource:World Bank(2020)63%Percentage of the populationwith a smartphone Source:GSMA(2020)$10.6BE-commerce revenueSource:Statista(2022)$8.6B Personal remittances receivedSource:FXC Intelligence(2021$0.2BPersonal remittances sentSourc
85、e:FXC Intelligence(2021)$39BExport valueSource:World Factbook(2020)$52BImport valueSource:World Factbook(2020)Key statisticsKey statisticsChile has a relatively low underbanked population compared to other countries in Latin America,although it has seen slower smartphone adoption than some of its ne
86、ighbors.Nevertheless,digital wallets are commonplace in the country,outpaced primarily by cards.Alternative payment methods are popular,and with strong e-commerce growth ahead,there is likely to be agreater transformation of the countrys payments landscape in the future.Chile18 MillionPopulation siz
87、eSource:World Factbook(2022)$317BSource:World Factbook(2021)GDP87%Percentage of the adultpopulation with an accountat a financial institutionSource:World Bank(2021)88%Percentage of the populationwith internet accessSource:World Bank(2020)62%Percentage of the populationwith a smartphone Source:GSMA(2
88、020)$9.9BE-commerce revenueSource:Statista(2022)$0.72B Personal remittances receivedSource:FXC Intelligence(2021$1.9BPersonal remittances sentSource:FXC Intelligence(2021)$79.8BExport valueSource:World Factbook(2020)$66.4BImport valueSource:World Factbook(2020)35.5Source:World Factbook(2020)Median a
89、ge19With high levels of smartphone and internet use compared to other parts of Latin America,Argentina has experienced continued growth in digital payments.This has helped reduce the size of the unbanked population,with many people adopting digital-only services as their first banking product.As a r
90、esult,e-commerce has seen significant growth over the past few years,particularly during the pandemic,although it remains below global averages at present.ArgentinaKey statisticsKey statistics46 MillionPopulation sizeSource:World Factbook(2022)32 MillionPopulation sizeSource:World Factbook(2022)$491
91、BSource:World Factbook(2021)GDP$223BSource:World Factbook(2021)GDP66%Percentage of the adultpopulation with an accountat a financial institutionSource:World Bank(2021)56%Percentage of the adultpopulation with an accountat a financial institutionSource:World Bank(2021)86%Percentage of the populationw
92、ith internet accessSource:World Bank(2020)65%Percentage of the populationwith internet accessSource:World Bank(2020)70%Percentage of the populationwith a smartphone Source:GSMA(2020)62%Percentage of the populationwith a smartphone Source:GSMA(2020)$11.1BE-commerce revenueSource:Statista(2022)$9.8BE-
93、commerce revenueSource:Statista(2022)$651B Personal remittances receivedSource:World Bank(2020)$2.9B Personal remittances receivedSource:World Bank(2020)$523BPersonal remittances sentSource:World Bank(2020)$165BPersonal remittances sentSource:World Bank(2020)$64.2BExport valueSource:World Factbook(2
94、020)$54.9BExport valueSource:World Factbook(2020)$52.1BImport valueSource:World Factbook(2020)$51.4BImport valueSource:World Factbook(2020)32.4Source:World Factbook(2020)Median age29.1Source:World Factbook(2020)Median ageWith a large unbanked population and relatively low internet and smartphone pen
95、etration,cash is a preferred form of payment in Peru.This has made solutions that give digital access to cash payments particularly popular.Most notable is PagoEfectivo,an online payment method that allows online shoppers to pay for their purchases through either online banking or cash at tens of th
96、ousands of payment locations in the country.Digital payments are also present,with cards being the most popular.Peru20Costa Rica has high levels of internet access but lower smartphone penetration,with the unbanked population remaining relatively high.It also has lower levels of credit card use than
97、 some countries in the region,with digital wallets being popular.Cash remains dominant,with services such as vouchers helping to provide access to digital services.Costa RicaKey statistics5 MillionPopulation sizeSource:World Factbook(2022)$64BSource:World Factbook(2021)GDP69%Percentage of the adultp
98、opulation with an accountat a financial institutionSource:World Bank(2021)81%Percentage of the populationwith internet accessSource:World Bank(2020)65%Percentage of the populationwith a smartphone Source:GSMA(2020)$1.7BE-commerce revenueSource:Statista(2022)$5225B Personal remittances receivedSource
99、:World Bank(2020)$496BPersonal remittances sentSource:World Bank(2020)$21.2BExport valueSource:World Factbook(2020)$20.5BImport valueSource:World Factbook(2020)32.6Source:World Factbook(2020)Median age21Industry challenges and barriers to payment adoptionFor companies looking to access or utilize pa
100、yments in Latin America,there are significant challenges and barriers to adoption that are important to take into account.Diverse payments landscape.While there are trends that are commonplace across much of the region,regulations,banking,FX controls,and payment infrastructure varies by country,maki
101、ng it difficult to tackle without the support of a payments partner.The size of the unbanked population.When it comes to digital payments,it is one of the biggest challenges,with notable variations depending on the country.It is important to be aware of this and the various solutions available in di
102、fferent countries to give such individuals access to digital payments.Beyond this,businesses should be aware of other challenges in the region.While the rise of e-commerce has significantly improved logistics,there remain challenges in the space that may impact how companies can operate.High levels
103、of fraud on international cards.Compared to other parts of the world,LATAM has 2.4 times the rate of fraud seen in the U.S.when it comes to such cards.Cross-border payments.This is a key concern for any business operating internationally with a leg in the region.With so many currencies and payment m
104、ethods,settlement is potentially challenging,particularly if a company is largely managing the issue itself.Levels of volatility within LATAM currencies.While some are stable,others are exceptionally volatile,which can make managing payments in and out of those countries particularly difficult,espec
105、ially for companies used to thinking in a single,stable currency such as the U.S.dollar.22Future payment methods:crypto and beyondThe payments landscape is evolving rapidly,with digital payments expected to see increased adoption over the next few years.This is likely to drive alternative payment me
106、thods,in particular mobile money solutions.At the same time,vouchers and other services that specifically cater to the unbanked are likely to decline as more people gain access to financial services for the first time.Real-time payment solutions such as PIX are also likely to increase in reach and p
107、revalence as countries seek to replicate the success seen in Brazil.While the benefits will be seen by businesses and consumers alike,consumers are likely to continue to play a key role in the evolution of payments in the region.Growing expectations around frictionless,simplified payments,particular
108、ly where these are already available for limited use cases,are likely to be a vital driver of further innovationparticularly as digital infrastructure and access to connectivity technologies continue to improve.Related to this is the ongoing importance of interoperability,which is only likely to imp
109、rove in the future.Making payment networks interoperable is a key way for providers to improve capabilities and so satisfy growing consumer demands.While it is often highly challenging to achieve,this remains a vital point of focus in the future.Beyond this,it is likely that open banking,which enabl
110、es financial data to be shared between institutions,will proliferate substantially.In some areas,open banking has already become well established,such as Brazil,where the National Monetary Council recently extended this to its Open Finance project.This move takes it beyond core banking products that
111、 are largely focused on a small number of banks to allow for new forms of data sharing that include foreign exchange,investments,and pensions.Given this,there will likely be support in the region for the development of multifaceted super apps that take a more holistic approach to financial services.
112、Not only will this provide increased transparency,but it may lead to the development or extension of other financial products in the wider region if other countries follow Brazils suit.And one benefit may be the continued rise of embedded finance,which sees financial processes embedded into other pl
113、atforms and services.23One area with potential is crypto.Cryptocurrencies already see outsized support in Latin America compared to other regions globally,with Brazil seeing one of the highest levels of ownership anywhere in the world.LATAM also has a more balanced gender split among crypto owners t
114、han in other regions,with 43%of owners being female,compared to just 32%in the U.S.and 35%in the U.K.Significantly,crypto use in LATAM has so far been focused on savings through its use as an asset rather than as a means of payment;while its use for money transfers remains limited.There have been so
115、me attempts to change this.El Salvador,for example,made bitcoin legal tender in mid-2021,although there have been significant issues with the initiative.Despite these unstable starts,it is expected that cryptos use will broaden in the future as ownership becomes more commonplace and support for its
116、use in payments increases.And with LATAM ownership already above global averages,it will likely be a key player,particularly as some areas have already created investment and development initiatives,including Hondurass Bitcoin Valley.“What weve seen so far is people using crypto as a method of savin
117、g money.We do see a movement around money transfer,but quite limited.-Christina Hutchinson,V.P.,Head of Sales and Business Development LATAM,NiumSource:Cryptocurrency exchange Gemini.Crypto ownership by countryLatin American residents who thinkcrypto is the future of moneyNon-crypto owners whoplanne
118、d to buy in 2022Source:Gemini(2021)Source:Gemini(2021)Source:Gemini(2021)BrazilBrazilBrazilColombiaColombiaMexicoMexico41%66%45%16%56%22%55%Mexico32%24Conclusion The transformation of cross-border payments in Latin America is underway,but there is far more to come.While there is marked variation bet
119、ween countries,relatively high levels of the unbanked and underbanked withinLATAM means that cash remains highly dominant.There is increased growth in alternative payment methods,particularly on the mobile side.This is being aided by growing levels of smartphone and internet adoption,although in man
120、y countries,there is still room for thisto develop further.Brazil is a particular leader in real-time payments with PIX.However,it is likely that there will be considerably more development in the space,while areas such as open banking promise to further enhance payment capabilities in the future.LA
121、TAM is likely to continue to see growth in the capabilities and adoption of digital payments,particularly in countries still catching up with the regions leaders in terms of access and infrastructure.Crypto may also play a greater role in the regions payments mix,given the relatively high support it
122、 already enjoys in LATAM.For businesses,the LATAM payments landscape is changeable and highly nuanced,bringing together a wide variety of regulations,payment types,and currencies,all of which need to be well understood to respond effectively.A payments partner that can provide easy,knowledgeable acc
123、ess to individual markets for pay in and pay out is,therefore,a significant aid to any company looking to make cross-border payments in the region.25About NiumNium is the global leader in on-demand money movement.It provides banks,payment providers,and businesses of any size with access to global pa
124、yment and card issuance solutions.Its modular platform powers frictionless commerce,helping businesses pay and get paid across the globe.Once connected to Nium,businesses can pay out in more than 100 currencies to over 190 countries100 of which in real About FXC IntelligenceLondon|Washington DC FXC
125、Intelligence is the leading specialist provider of cross-border payments data.Serving the global payments,remittance,cryptocurrency,e-commerce,and cards industries,FXC Intelligences clients include the worlds biggest banks and payment companies,as well as top-tier technology companies,investors,and
126、regulators.Founded in 2014 by global payments authority Daniel Webber,the company has developed a unique set of enterprise-grade financial datasets,which it continues to develop and expand.Such data is becoming increasingly vital to the global payments industry,proving critical to management teams i
127、n a sector that is becoming ever more competitive and growth oriented.Accessed via FXC Intelligences web portal or API,FXC includes analysis based on thousands of different data sources that provide a clear,accurate and contextualized picture of the global payments space.Our cross-border payments da
128、ta is the most widely used in the industry and covers around 1,000 banks and payments companies across 15,000+currency corridors,spanning cards,FX payments,eCommerce and cryptocurrencies.Clients include HSBC,Mastercard,PayPal,Remitly,Wells Fargo,Western Union,and the World Bank.time.Funds can be rec
129、eived in 35 markets,including Southeast Asia,the U.K.,Hong Kong,Singapore,Australia,India,andthe U.S.Our growing card issuance business is already available in 34 countries,including Europe(SEPA),the U.K.,Australia and Singapore.Nium holds regulatory licenses and authorizations in over 40 countries,
130、enabling seamless global payments and rapid integration,regardless of geography.26About the authorLucy Ingham Head of Content,FXC Intelligence Lucy is Head of Content at FXC Intelligence,overseeing all content and taking deep dives into the trends and data driving changes in payments.Before joining
131、FXC Intelligence,Lucy worked as a technology journalist and editor,interviewing CEOs and major names across enterprise technology,including fintech.She has an MSc in Development Anthropology from Durham University.To find out how you can enjoy the value of a truly modern payment system visit to book a consultation with one of our payment experts.Reach out to learn more.CONTACT NIUM