Real-time payments Trending in Latin America

 

Real-time payments are trending in countries around the world,

Latin America is no exception.

By Rolando Polanco

July 29, 2024

In several studies, 76% of respondents indicated that real-time payments are the most significant digital payment trend in the region, surpassing payments accounts 2 accounts (A2A), like Brazil. 

This trend is great news for both the global economy and the payments industry. A study conducted in 2021 revealed that instant payments increased the GDP by $78 billion in 30 international markets, and this is just the beginning.

The increasing popularity of real-time payments is driving innovation output, competition, cash flow, and overall economic growth in Latin America. In this post, we will analyze the current state of real-time payments in Latin America, the benefits of this trend, and the future of digital payments at the regional level.

Instant Payments in Latin America:

Statistics show that among all the countries in Latin America that are adopting real-time payments, today, Brazil is the clear leader. The e-payment platform PIX has a 74% adoption rate among the country's adult population, and instant payments accounted for 31% of all e-payments in 2022.

 But the volume of PIX transactions continues to surge. There were an estimated 5.3 billion PIX transactions in June 2024, which was 60% more than in June 2023.

 Approximately 2.2 billion PIX transactions per month (42%) are initiated by someone scanning a QR Code.

 The number of PIX transactions is 45% more than credit and debit combined. 

 As of June 2024, over 156 million Brazilian adults and 17 million businesses are using PIX as their preferred payment method.

 The fastest-growing use case for PIX is payments between consumers and businesses. P2B transactions were 39% of total PIX transactions in June 2024, compared to 30% in June 2023.

 In less than four years, PIX has grown to represent 43% of all payments in Brazil.

Colombia closely follows with PSE payment "an ACH Colombia Service"; in fact, PIX and PSE account for 90% of all instant payment volume in the region. ACH Colombia recently became the first financial services company in the country to modernize its cloud payments infrastructure and the second in the region to do so. ACH Colombia is transforming its solution into a fully hybrid and multi-cloud operation fully prepared for the digital future in real time 24/7.

Other RTP in Latin America are following the example:

 Peru plans to recreate PIX for their citizens. 

 SPEI in Mexico

 Simple in Bolivia

 Sinpe Móvil in Costa Rica

More than 30 instant payment tools are being developed in the region, both in the public and private sectors.

How do real-time payments benefit Latin America?

Digital payments are becoming faster and more accessible, offering Latin American citizens a safer way to make payments. As a result, a whole group of countries is becoming more dynamic, resilient, and innovative. Real-time payments have changed the financial landscape in Latin America.

They offer significant advantages, such as promoting greater financial inclusion, boosting cash flow, and empowering FinTech. This has also helped reduce costs for businesses, encouraged the growth of open banking, and increased digital commerce. These innovations have increased competition, which has led to economic growth throughout the region. The impact of real-time payments cannot be overstated as they have revolutionized the way businesses and consumers transact, opening new opportunities and possibilities for growth.

A look at the future of digital payments

Real-time payments are not just a passing trend in Latin America; they represent the future of digital payments around the world. In the region alone, instant payments are expected to grow by more than 40% each year between now and 2028. Worldwide, the trend has an expected annual growth rate of 25.6% through 2028, which will account for around 25% of all global electronic payments.

The future is bright for Latin America, with faster payments that will bring greater innovation and financial inclusion to its citizens.