Data collected by Rapyd shows that digital payment preference is a main factor for consumers in LATAM, Social Commerce is rising as a driver in eCommerce, and digital banking create a shift away from traditional banking
LONDON and MOUNTAIN VIEW. Rapyd, a global Fintech-as-a-Service company, released the results of a new survey exploring the adoption of digital finance tools and eCommerce in Argentina, Colombia, Mexico, and Brazil.
Despite the region’s large “unbanked” population, the survey found that among those with active bank accounts there is a strong and growing preference for digital services, setting the stage for continued growth across the region. Usage of bank apps and online banking services is high in LATAM, with 98% of Brazilian, 94% of Mexican and Colombian, and 89% of Argentinian bank customers stating regular usage.
The trend is not restricted to bank-supplied services, with the region also demonstrating extremely high usage of non-bank payment apps. 96% of Mexicans and Brazilians, 87% of Colombians, and 84% of Argentinians regularly use applications such as PayPal, Modo, MercadoPago, and others.
The survey also found rapid adoption of social commerce and a marked increase in purchases. Over 50% of consumers surveyed have made social commerce purchases, and 40% identified the greater variety of payment methods as a benefit for choosing social commerce.
“Latin America is quickly emerging as one of the most digital-savvy markets for financial services,” said Eric Rosenthal, VP of Rapyd for the Americas. “Whether you’re a company already operating there or you’re poised to enter the market for the first time, it would be unwise to ignore the shifts in consumer behavior. Our data strongly indicates that businesses with an eye on LATAM should meet consumers where they are increasingly operating – digitally.”
Additional findings further demonstrate the rising importance of digital and mobile-first financial services, as consumers increasingly rely on them far above traditional banking methods.
- Latin Americans’ willingness to leave traditional banks in favor of digital-only banks is already high and still growing. 83% of Brazilians, 65% of Mexicans and 67% of Colombians express readiness to make the shift, while only 34% of Argentinians are currently willing to do so.
- When making social commerce purchases the most dominant payment method in Colombia and Mexico is a bank transfer, with 61% in Colombia and 54% in Mexico. In Argentina transfers are tied as the most used method at 41% along with cash payments in local convenience stores. Only in Brazil do cards still dominate, with credit cards taking the top spot with 67%.
- While social commerce continues to lag behind traditional eCommerce with over 55% of LATAM consumers citing their remaining preference for traditional eCommerce channels, this statistic is likely to change as social marketplaces expand their payment acceptance methods to include cash vouchers as well as digital payments.
The study is the first of several that Rapyd will be conducting in LATAM to better understand shifts in consumer behavior. Over 1,000 active bank and banking services users from Mexico, Colombia, Argentina, and Brazil took part in this survey. The complete report is available here.