The shift in user preference towards electronic payment methods, as well as the proliferation of digital products and services in the banking sector, are pushing transactional activity across Latin America into a phase of profound change. In the long run, the region will lead the electronic payments industry in Latin America, as consumers fully embrace digital solutions to manage their financial operations, according to a new report by the global consulting firm.
The annual report “The Future is Anything but Stable”, published by Global Payments at BCG (Boston Consulting Group) and which assesses global industry trends, predicts that Latin America’s use of digital payment methods will grow by an average of 7.9% per year between 2024 and 2029, a rate that is “almost twice as fast as the world average of 4% in the same period.
The figure means that Latin America is well on its way to not just participating but also to dominating key electronic payments industry in Latin America debates and, above all, in charting the future of financial products and services in the age of digitalization.
Electronic Payments Industry in Latin America: Global Analysis and Trends
As a reminder, the global electronic payments sector is estimated to reach revenues of US$2.4 trillion by 2029 but will register an annual decline in growth, settling at 4%. The trend of year-over-year growth deceleration is taking place even as the industry is undergoing a historic reconfiguration under the impact of the implementation of frontier technologies and business model reinvention, with a view to fully meeting customer expectations.
Artificial intelligence, as well as other digital assets, solutions, and services are key here, such as agentic artificial intelligence (AI), which the BCG Global Payments report recognizes as one of the main tools for reinventing how people and businesses buy, sell, borrow and lend money in the years to come, especially in the retail sector, along with digital currencies and next-generation fintech business models.
In fact, agentic AI is expected to change the rules of the game for e-commerce and consumer transactional behavior in particular. For those unaware, an agentic AI system is an AI that can achieve a goal with limited or no supervision. In short, an autonomous, intelligent system, similar to a human agent. Going back to digital spending and purchasing activity, the study forecasts that agentic AI may generate more than one trillion dollars in e-commerce revenues globally. In the United States, 81% of surveyed consumers say they will use an agentic AI tool to make online purchases, a clear indication that, in the coming years, this tool will be able to influence over half of all online transactions, according to the report.
Latin America: Transactional Activity Expansion
Latin America, meanwhile, is expected to ride this wave, taking the lead in electronic payments industry in Latin America thanks to regional companies’ abilities to adapt to these and other digital trends and turn them into tangible value for all customers in this increasingly competitive, highly digitalized segment. In this regard, the report says the new digital payment solutions will continue to grow in the region at a “solid” pace and are expected to move at an estimated growth rate of 8% per year until 2029.
“The evolution of new electronic payments in Latin America is set to continue positively in the coming years”, states Gonzalo Troncoso, BCG Managing Director and Partner and co-leader of the Global Payments practice. To some extent, the region will be outpacing the rest of the world in this respect, since the adoption rate for electronic payment methods there is set to reach 7.9% in the coming years against a global average of 4%: what the report calls a “very robust expansion”.
Specifically, the increase in e-payments adoption can be explained by such factors as widespread mobile technology adoption for processing transactions, enabling the development of digital wallets and P2P payments. Then, some government policy changes and regulations are intended to “facilitate” digital financial services, and then, the region’s fintech firms, renowned for their agility and creativity, are providing new payment options that are fast, secure, and easy to use.
Latin America, in short, is quickly becoming a regional leader in fintech activity and generating significant volumes of investment for e-payments industry in Latin America products, solutions, services, and companies.
Electronic Payments Industry in Latin America: National Trends
In fact, at the country level, one may highlight the example of the Dominican Republic, where the process of implementing and adopting electronic payment systems is advancing at a significant pace. The initiatives of the BC (Central Bank) to upgrade and reinforce the country’s digital finance ecosystem are key here. Consumers are being encouraged to fully embrace digital channels for their banking operations, to the detriment of more traditional financial channels. At the moment, more and more Dominican bank clients make use of electronic channels to:
- Process transfers
- Pay for services, as well as goods and other purchases
- Withdraw and deposit money at ATMs
- Buy goods and services at physical or virtual POS
The BC’s statistical evidence of how things are rapidly changing in the retail payments segment shows that, between 2008 and 2021, the volume of electronic payments recorded a spectacular increase of 503.5%, while the use of checks plummeted by -33.7%.
To be more specific, in 2008 there were 76.5 million electronic payments, compared to only 32.0 million checks, while by 2021 there were 462.0 million electronic payments and 21.2 million checks.
Market share data in that same time interval is also very revealing, for in 2008 the volume of electronic payments represented 70.5% of total operations, while in 2021 this figure had grown to 95.6% while only 4.4% of all transactions were by check. Electronic transactions, in short, have not just seen an increase in their numbers but are now considered to have reached maturity in the Dominican market.
Dominican consumers are said to be increasingly likely to use their bank accounts for retail payments, whether through the use of debit and credit cards at the POS, ATMs, or online. Financial technology companies (fintechs) have been a leading force behind this transformation. Payment fintechs in particular have grown by 23% a year and accounted for US$176 billion in revenues in 2024 alone. In 25 years, more than US$135 billion of equity capital has been raised by these businesses.
Payment fintechs account for almost half (45%) of all fintech revenues, while the top performers have grown three times faster than incumbent banks. This success is partly due to the fact that fintechs have focused on specific opportunities, and on investing and innovating rapidly to meet rapidly changing consumer expectations.
These forces put increased pressure on companies that are not active in the fintech space and which have not adjusted their business models to keep pace with market evolution. Companies and other financial institutions are increasingly compelled to use cutting-edge technology to keep up with the e-payments industry in Latin America growth and remain competitive.
AI Agents and E-commerce: The Future of E-commerce in Latin America
BCG’s report also underlines the agentic AI’s potential to completely reinvent e-commerce in Latin America. An agentic AI system is capable of using machine learning techniques to achieve a given objective with only a small amount of supervision or guidance, operating, so to speak, automatically and independently, in a manner very similar to the work of a human agent.
In terms of how it could have an impact on online buying activity, for example, the BCG report anticipates it will be used to provide product and service recommendations to consumers on the basis of previous purchases and use data, to automate non-optional purchases and transactions, and to increase the overall efficiency of the online shopping experience.
Agentic AI is also being used by a growing number of online merchants, as well as banks and other retail financial service providers, to decrease friction in the buying and checkout process, reduce the costs associated with online shopping, and increase fraud prevention and security.
As such, it is estimated that within the near future, AI agents will have the capacity to influence over half of all online sales. In short, this tool’s potential to fully personalize the customer experience and customize retail banking services according to their purchasing history and current transactional behavior.
Future Scenarios in the Electronic Payments Industry in Latin America
Summarizing and looking to the future, the electronic payments industry in Latin America will continue to grow at a rate well above the world average, at least for the next decade.
The rate of growth will be greater in the following cases:
- Fintech companies offering new services and solutions to financial sector customers
- SMEs and other companies which engage in digital finance, thus offering their services through mobile and other digital payment channels
- Agencies and central governments encouraging their citizens to adopt these types of digital financial solutions and using payments as a policy tool.
- Firms and investors, to be on the winning side of this digital growth, must therefore keep their eyes open and make sure to leverage these and other technological tools to remain relevant and competitive, and adapt business models and strategies to keep in line with customers’ preferences and needs.
In conclusion, companies that remain digitally stagnant risk not being left behind and losing market share and revenues to those that will incorporate these digital solutions into their operational model and set of activities. As a result, we can say that Latin America’s electronic payments industry in Latin America is growing and will continue to do so on an accelerated trajectory for at least another decade.