COVID-19 pandemic catalyzed the expansion of digital payments in Latin America

The COVID-19 pandemic was a catalyst for the expansion of the digital payments in Latin America, especially among small and micro companies, according to a new study carried out in the region by the electronic payments firm Visa.

Restrictions on mobility and the promotion of contactless transactions accelerated a process of technology adoption that before 2020 was advancing at a much slower pace, although today almost half of Latin American small businesses already accept electronic payments.

“The change that has occurred in twelve months is equivalent to what in normal conditions would have occurred in ten years,” Juan Pablo Cuevas, vice president and head of Visa Business Solutions for Latin America and the Caribbean, said in an interview with Efe.

Of all the businesses that started accepting electronic payments during the pandemic, 80% were small or micro businesses, and the most popular new adoption systems were QR codes (32%), sales through the website (30 %) and contactless payments by cards or cell phones.

However, the great challenge for the region, the report points out, is the 53% of small companies that still do not accept electronic payment systems, which translates into approximately 21 million businesses.

“If one passed before a small store to have a coffee, with the pandemic, the coffee had to come home, but the shopkeeper did not know how to send it or how to charge the customer,” said Cuevas, who explained that the great Visa’s challenge during those months was to help open channels so that these small companies could position themselves in the digital environment.

The study indicates that the market compensated those who took advantage of the pandemic situation to make the leap to the digital world: businesses that adopted online sales systems saw their sales grow in 74% of cases, as did 82% of those who They adopted electronic payments in person (with cards, cell phones …).

One of the aspects that continue to worry small entrepreneurs in Latin America the most is fraud, so contributing to increase trust and familiarity with electronic payments is one of the main challenges for Visa and the entire ecosystem for the future.

The Visa and Americas Market Intelligence study was carried out through interviews with 600 small and micro companies, between May and June 2021, in Brazil, Mexico, Colombia, Argentina, Chile and Peru.