How Some LatAm FIs Embrace The Digital Shift

Consumers in Latin America (LatAm) are increasingly embracing digital-first payment options instead of cash.

As one recent study uncovered, the COVID-19 pandemic led 62% of consumers in that part of the world to cut back on cash use in 2020, while the use of contactless credit and debit card use rose 40% during that same period.

Another report found that more LatAm consumers wish they had faster payment methods, with four out of five people surveyed saying quicker payments were an attractive transaction option. Financial institutions (FIs), and legacy banks in particular, should keep this shift in mind as they work to hold onto customers.

Read on to learn more about a few FIs who are doing just that.

Mastercard, Juvoh Help ID the Unbanked

Mastercard recently announced it was expanding its partnership with the financial identity-as-a-service platform Juvo to bring more of its services into the Latin American market.

The card company says the collaboration will employ Juvo’s identity solutions to extend financial access to LatAm’s unbanked or underbanked people, with the hope of helping these customers use a wider array digital banking tools.

Mastercard says roughly 300 million residents in Latin America and the Caribbean lack formal banking accounts. Giving these consumers digital financial identities can help them let go of their reliance on cash payments and fuel an ongoing development of digital banking and payments in the region.

Santander Offers Unbanked a Digital Wallet

Because giving unbanked/underbanked customers access to digital financial tools can broaden financial inclusion and reach new audiences, many banks have made doing so a priority. One of these banks is Santander Group, which hopes to connect with unbanked consumers through Superdigital, a digital wallet product.

This tool recently won approval from Mexico’s National Banking and Securities Commission to function as an electronic payment fund institution within the country. The bank expects the wallet to launch officially this spring.

Would you like to know more about this topic? Download your copy of the Digitizing Payments In Latin American Playbook, a PYMNTS and Kushki collaboration.