Cash keeps dominating at the point of sale in Latin American countries like nowhere else in the world
Payment methods in Latin America are changing along with global trends, according to Worldpay from FIS research. The research found that cash accounts for 58% of POS, compared to 15% in North America and 30% globally.
The statistics reflect the fact there is a large unbanked or underbanked population or limited POS e-payment acceptance. Furthermore, Latin American consumers are mandated to pay high banking fees, having permanent concerns about fraud.
Along with that, smartphone penetration among consumers has grown at a much higher rate than those using traditional financial services. This way, countries of Latin America express an interest in digital payments but the countries have a lack of infrastructure to support it.
The study unveiled a cash influence on e-commerce, as well. For instance, PostPay services allow consumers to purchase electronically while ultimately completing the transaction with cash. PostPay accounts for 8% of regional e-commerce spend, while cash on delivery represents an additional 5.8%.
According to the research, by 2023, e-commerce in Mexico is expected to grow at a CAGR of 12%, while in Argentina analysts forecast a 19% CAGR over that period. In Peru, cash is accounting for 60% of spend, however, the country is moving towards e-commerce due to increasing mobile penetration.