The impact of the pandemic’s catalysation of digital transformation has been evident across the globe, but Latin America (LatAm) in particular has been a region massively impacted. Research from Rapyd, a global Fintech-as-a-Service company, has found that 98 per cent of Brazilian, 94 per cent of Mexican and Colombian, and 89 per cent of Argentinian bank customers are stating regular usage of banks’ digital avenues.
This usage is made even more impressive by the fact the region has previously been largely ‘unbanked’. Active bank services are seeing a big uptake and preference in digital services. The trend is not restricted to bank-supplied services though, with the region also demonstrating extremely high usage of non-bank payment apps. 96 per cent of Mexicans and Brazilians, 87 per cent of Colombians, and 84 per cent of Argentinians regularly use applications such as PayPal, Modo, MercadoPago, and others.
The survey also found rapid adoption of social commerce and a marked increase in purchases. Over 50 per cent of consumers surveyed have made social commerce purchases, and 40 per cent identified the greater variety of payment methods as a benefit for choosing social commerce.
“Latin America is quickly emerging as one of the most digital-savvy markets for financial services,” said Eric Rosenthal, VP of Rapyd for the Americas. “Whether you’re a company already operating there or you’re poised to enter the market for the first time, it would be unwise to ignore the shifts in consumer behavior. Our data strongly indicates that businesses with an eye on LatAm should meet consumers where they are increasingly operating – digitally.”
Additional findings further demonstrate the rising importance of digital and mobile-first financial services, as consumers increasingly rely on them far above traditional banking methods.
- Latin Americans’ willingness to leave traditional banks in favour of digital-only banks is already high and still growing. 83 per cent of Brazilians, 65 per cent of Mexicans and 67 per cent of Colombians express readiness to make the shift, while only 34 per cent of Argentinians are currently willing to do so.
- When making social commerce purchases the most dominant payment method in Colombia and Mexico is a bank transfer, with 61 per cent in Colombia and 54 per cent in Mexico. In Argentina transfers are tied as the most used method at 41 per cent along with cash payments in local convenience stores. Only in Brazil do cards still dominate, with credit cards taking the top spot with 67 per cent.
- While social commerce continues to lag behind traditional eCommerce with over 55 per cent of LatAm consumers citing their remaining preference for traditional eCommerce channels, this statistic is likely to change as social marketplaces expand their payment acceptance methods to include cash vouchers as well as digital payments.
The study was the first of several that Rapyd will be conducting in LatAm to better understand shifts in consumer behaviour. Over 1,000 active bank and banking services users from Mexico, Colombia, Argentina, and Brazil took part in this survey.