Ecommerce in Latin America has grown substantially in the past few years, with online retail sales alone totaling over $319 billion USD in 2024. The number of digital customers in the region has increased similarly, with smartphones powering almost three-quarters of online retail transactions in early 2025. Businesses that want to enter the Latin American market can benefit from these trends by supporting local payment preferences.

Below, we’ll discuss tactics for businesses that are considering accepting payments in Latin America, including:

• Balancing digital payments and cash
  
• Incorporating local payment methods
  
• Prioritizing solid payment security
  

The state of the market

Each Latin American country possesses unique characteristics that have shaped its economic and financial systems, including historical, geographical, and cultural influences. These factors result in distinct payment preferences and consumer behaviors across the region.

Historically, Latin America relied heavily on cash payments, due in part to its large unbanked population. For example, around 26% of the population in Latin America were unbanked in 2021. However, technological advancements are moving the region’s payment systems toward digital payment methods, including credit and debit cards, contactless payments, and digital wallets.

Many governments and regulatory agencies in Latin America have actively encouraged electronic payments as part of broader strategies to increase financial inclusion and reduce the reliance on cash. Payment security and data protection guidelines aim to lower the risk of fraudulent payments, benefiting both customers and businesses. But safeguarding financial transactions remains a challenge.

Payment methods

Latin American customers rely on a range of payment methods, from cash and debit cards to digital alternatives such as mobile payments. Here are the most common payment methods in this market for in-person and online transactions.

Current usage

While cash usage remains relatively high in Latin America, it’s on the decline. A 2023 McKinsey survey found that debit cards have replaced cash as the preferred payment method among Spanish-speaking people in Latin America, with 36% of survey respondents citing debit cards as their preferred payment method for in-person purchases. In comparison, only 30% cited cash and 18% cited credit cards.

However, when it comes to ecommerce, credit cards made up 42% of payments in Latin America in 2024, with digital wallets accounting for 10%.

Popular B2C payment methods in Latin America

• Credit cards
  
• Debit cards
  
• Digital wallets
  
• Bank transfers
  

Popular B2B payment methods in Latin America

• Credit cards
  
• Bank transfers
  
• Wire transfers
  

In general, cultural influences—stemming from colonization and geographical influences—have led to divergent development paths in payment systems across Latin America. Understanding these cultural nuances is key for businesses aiming to succeed in the region.

Emerging trends

Instant bank transfers and QR code payments are on the rise in Latin America. For instance, Brazil’s Pix, an instant payment system developed by the Central Bank of Brazil, enables fast transfers 24 hours a day and has facilitated transactions by 71.5 million individuals who had not made an electronic credit transfer for more than 1 year prior to Pix’s launch, as of December 2022. Systems such as Pix make QR code payments more accessible for both businesses and customers.

Cryptocurrency has also gained popularity. Digital currency’s appeal to people in Latin America largely stems from the fact that it doesn’t require a traditional bank account and provides an alternative store of value that’s not subject to the same risks as local currencies.

Geographical factors also play a significant role: Mexico’s proximity to the United States has facilitated technological adoption and financial integration with the North American market.

Ease and friction of entry

Companies need to consider taxes, chargebacks, cross-border payments, and payment security measures before they accept payments in Latin America. Here’s an overview of what they should know.

Taxes

Value-added tax (VAT) is common in Latin American countries and ranges from 7% in Panama to 22% in Uruguay. Customers pay this tax at the point of sale, while businesses are responsible for collecting and remitting it to the government. It’s important for businesses to get VAT right because incorrect handling can result in penalties.

Chargebacks and disputes

Latin America’s chargeback processes for cards align with global standards, and they’re typically led by card networks, banks, and financial institutions. Customers have the right to dispute charges they don’t recognize or purchases they never received. The business is notified when a customer disputes a transaction and the funds are usually held temporarily while an investigation is carried out. The business can then provide evidence of the payment, such as transaction records, delivery confirmation, and communication with the customer. However, these processes might vary across different payment methods. Specifically, the Brazilian Pix system features a unique dispute mechanism that enables the immediate return of funds in cases of suspected fraud or errors.

International payments

International payments pose their own challenges. It’s worth considering the following factors if your business will accept payments from multiple countries or in multiple currencies:

• Currency conversion
  Most Latin American countries have their own currencies, which means currency conversion is required when you accept payments across the region. Financial institutions often add a markup for business customers at the interbank rate—the baseline rate for currency conversion at which banks lend to each other. Third-party payment providers can simplify cross-border transactions by handling currency conversion automatically.

• Fluctuating currency values
  Many currencies in the region, including the Argentine peso and Venezuelan bolívar, fluctuate more drastically than the US dollar and the euro. These currency shifts can negatively impact cross-border transactions, as well as the purchasing power of Latin American customers.

• Legal and regulatory compliance
  Regulations around international payments differ throughout the region and might change as digital transactions increase. Ensure your business complies with the specific laws of each country you’re operating in.

Security and privacy

Latin American countries take payment security seriously. They use data protection laws, Anti-Money Laundering (AML) regulations, and authentication mandates to protect their payment systems. Here’s a rundown of security and privacy considerations to keep in mind:

• Data protection laws
  Legislation in countries such as Colombia and Brazil require businesses to protect customers’ personal data and obtain clear consent before collecting or processing personal information.

• Customer authentication requirements
  For online transactions in particular, two-factor authentication is common. It adds another layer of security to lower the chance of unauthorized access and fraudulent activities.

• AML regulations
  AML guidelines in Latin America adhere to international best practices, requiring due diligence from financial institutions. That involves monitoring accounts, especially those involved in high-volume transactions, for any suspicious activity.

• Payment Card Industry Data Security Standard (PCI DSS)
  PCI DSS compliance is necessary for any business or payments platform that accepts credit card transactions. This global standard outlines best practices for storing, processing, and transmitting cardholder data to reduce the risk of fraud.

Key success factors

Entering the Latin American payment sector will require localized tactics to address disparities in the financial system, a growing mobile commerce market, and payment security threats. Here are some strategies for businesses to successfully expand into Latin America:

• Varied payment methods
  Despite some advancements, a broad segment of Latin American populations remains underbanked. This limited access to financial services creates obstacles for digital payments that businesses can overcome by accepting cash for in-person payments and offering multiple payment methods for online purchases.

• Smooth mobile checkout
  After Asia Pacific, the Middle East, and Africa, Latin America has the highest share of online retail sales attributed to mobile commerce. To capitalize on this, businesses should update their payment pages for mobile devices and accept mobile payment apps and digital wallets at checkout.

• Localized payment pages
  Many Latin American countries have hyperlocal payment methods that aren’t found elsewhere. Accommodating these preferences signals to customers that your business understands the local community. Similarly, localizing the language on your payment interfaces can make the checkout process more approachable.

• Advanced security measures
  Latin America accounted for 12% of all cyberattacks worldwide, according to a 2023 report. Businesses should invest in advanced fraud detection systems and secure payment gateways to mitigate the risks of fraudulent transactions and avoid financial losses.

Key takeaways

Businesses that want to expand into Latin America must understand local preferences and limitations. With the right strategies, they can improve the payment experience while increasing sales and building trust among Latin American customers.

Here’s a recap, along with tips for your business.

Balance digital payments and cash

• Don’t overlook cash
  Despite the growth of digital payments, cash remains a primary payment method across the region. If your business will open a physical store, accepting cash can support a broad segment of customers who don’t use digital payment methods.

• Embrace credit and debit cards
  Card payments have become increasingly popular for various types of transactions in recent years. Businesses should include credit and debit card options at checkout for customers who prefer to pay by card.

• Accommodate digital wallets
  Digital wallet adoption is increasing, so accepting digital wallets both in person and online can help your business benefit from this payment trend.

Incorporate local payment methods

• Support local mobile payment methods
  Digital wallets such as Nubank, Mercado Pago, and PicPay are popular in Latin America. Accepting these payment methods can encourage more digital payments.

• Integrate with instant payment systems
  Take advantage of local instant payment systems, such as Brazil’s Pix, to offer customers a fast, convenient checkout process.

• Offer localized interfaces
  Localizing your payment interfaces to each country through payment and language options can improve customers’ payment experiences and build trust in your company.

Prioritize solid payment security

• Secure online payments
  Ecommerce sales increase the risk of unauthorized transactions. Fraud detection tools such as machine learning algorithms and 3D Secure can catch potential online payment fraud before it happens.

• Store customer data securely
  Comply with local laws around data privacy, as well as global PCI DSS standards, to protect cardholder data and avoid penalties for improper data handling.

• Monitor payment security updates
  Payment security regulations are always changing, so it’s important for your business to stay up-to-date on the latest guidelines in each country. Updating your business’s fraud detection and prevention protocols regularly can also keep your payment environment as secure as possible.