Latin America Is Becoming a Benchmark for the Fintech Market

If there is a market that has been growing by leaps and bounds around the world, it is that of technological applications, whether for home addresses, tracking, company accounting, gaming, health care, and even better management of finances. With each passing day, new offers are known in the market and users have more options to choose the one that best suits their needs.

In all this, there is a special branch in which Latin America has become quite relevant compared to other regions in recent years, it is the Fintech or financial technology, which is nothing more than those developed with the financial industry, with a view to applying new technologies to financial and investment activities. That, according to experts, is thanks to its great potential for innovation.

At least this is evidenced in a recent study by Rapyd, entitled “State of Payments in Latin America 2022″, which was conducted with consumers in Argentina, Brazil, Chile, Colombia, Mexico, and Peru; to know the most used and preferred ways to make and receive payments. The results show that with the region’s hyper-growth in local and cross-border business, the region is emerging as a key market for the expansion of global companies.

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50% of respondents in the region prefer to receive their salaries by direct bank transfer

According to this analysis, entrepreneurs, workers, and suppliers in several countries are looking for fast and secure payments and collections that can be made in their preferred method. It is for this reason that they mainly turn to Fintechs as a viable alternative to be able to carry out their transactions in a short time and securely.

For the case of Colombia, this report states that 70% of consumers currently have a savings account and 54% have a debit/ATM card. Likewise, 46% have a credit card, 16% have a crypto investment, and only 7% have a checking/banking account.

“48 % of Colombian consumers said they have used in the last 30 days an e-wallet app and 20 % a cryptocurrency app, being the third country that has used the app the most in the region. “Forty-four percent of consumers say they like to explore ‘smarter’ technologies that make payment/billing better for them,” Rapyd stated in the study results.

Taking a look at the landscape as such in the region, he added that Latin America has adopted an open mindset to fintech and shows a clear preference for digital methods of receiving payments. As a result, more than 50% of respondents in the region prefer to receive their salaries by direct bank transfer, as well as other income from rent, tax refunds, loan payments, and commissions.

“E-wallets and bank transfers obtained between 21% and 50% preference as another preferred way to receive payments for personal gift income, reimbursements, commissions, and others. Despite all this, cash is not going away and remains one of the most common ways to receive payments. More than 20% of respondents said they had received cash payments in the last three months,” the report says.

In all of this, it also highlights that nearly 40% of Latin American consumers receive regular payments for freelance and gig or collaborative economy work. Many of these freelancers do not have access to traditional bank accounts and are more willing to receive direct same-day digital payments through e-wallets or other digital methods.

“Finally, the world is seeing what we have known to be true for years: Latin America is a hotspot for innovation in financial technology. When it comes to paying and receiving payments, Latin American consumers operate with a digital mindset, and have already adopted innovative practices that the rest of the world is still accustomed to. Localized payment and charging in preferred local methods continues to be one of the most requested features we are seeing across the region and our research confirms this,” commented Marc Winitz, Chief Marketing Officer at Rapyd.

Finally, the Rapyd study found that more than 40% of Latam consumers consider themselves “explorers” of smart payment technology and are open to exploring innovative technologies. Only 13% of consumers surveyed identify themselves as “laggards” with respect to their own adoption of fintech applications.

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(Featured image by Social Income via Unsplash)

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First published in Semana, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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