LatAm’s Gig Economy Is Growing, Studies Show, Along With Digital Payments

The gig or sharing economy has become an enticing employment opportunity for people in Latin America over the past two years, especially as new payment methods become available.

This is especially true for delivery and rideshare services, with one study showing that on-demand delivery platform and mobile wallet provider Rappi had 30,000 delivery drivers by the end of 2020. The same study found that about 600,000 Chilean consumers were employed as freelance drivers by the middle of last year, a sign that this type of gig work is quickly taking off across the region.

In addition, many delivery, rideshare and other gig economy platforms offer virtual payments and often let underbanked or unbanked workers transfer funds to mobile wallets rather than bank accounts.

Gig work and digital/mobile-focused payment method adoption seem to be rising in tandem throughout Latin America, with consumers more frequently turning to online channels and transaction methods. One new study found that more than 50% of consumers in Latin America said they don’t want to patronize companies that don’t accept electronic payments.

These trends suggest that such payment methods are on their way to becoming ubiquitous in Latin America, a movement that could prompt more people in the region to consider accepting their paychecks or other incoming disbursements digitally.

The gig economy’s continued expansion could change how Latin American workers find work and receive payment, particularly as businesses around the world begin to embrace the concept of hiring remote freelancers. A study in September 2021 found that 53% of United States businesses have become more willing to hire remote freelancers, and 71% of hiring managers plan to increase the use of freelancers.

A close watch on how the gig economy is expanding and how consumers’ payment preferences and needs are shifting in Latin America will be essential for merchants, FinTechs and other entities looking to do business in that region. Earning the trust of gig workers and understanding how digital payment methods can meet their needs will be vital to keeping workers engaged and satisfied in the years to come.

For more on the rise of the Latin American gig economy, download the latest Digitizing Payments In Latin America Playbook, a PYMNTS and Kushki collaboration.