Latin America is Rapidly Abandoning Cash❗️

Latin America is Rapidly Abandoning Cash❗️
This is the conclusion reached by experts at McKinsey… During the study conducted between 2021 and 2023, 15,000 people were surveyed in 10 Spanish-speaking countries in Latin America: Argentina 🇦🇷, Chile 🇨🇱, Colombia 🇨🇴, Dominican Republic 🇩🇴, Ecuador 🇪🇨, Guatemala 🇬🇹, Panama 🇵🇦, Peru 🇵🇪, Costa Rica 🇨🇷, and Uruguay 🇺🇾. Brazil is not included because Portuguese is spoken there, and Mexico is not included simply because it was not part of the study.

➡️ The percentage of respondents who named cash as their preferred payment method halved, while the proportion of those who prefer cashless payments (debit card, credit card, or mobile payments) more than doubled.

➡️ Meanwhile, debit cards clearly dominate in Chile (81%), Dominican Republic (56%), and Guatemala (55%), while mobile payments are gaining ground more quickly in Argentina (30% of users), Colombia (52%), Panama (39%), and Peru (32%).

➡️ BancoEstado, the state bank of Chile, played a key role in facilitating access to debit cards through the implementation of CuentaRUT — a digital card with no maintenance fees, linked to Chileans' ID numbers.

➡️ People who said they prefer debit cards cited factors such as speed and ease of payment, better spending control, and merchant discounts when using debit cards. Credit card enthusiasts, on the other hand, highlighted the ability to pay in installments at low interest rates and the availability of bank loyalty programs.

➡️ Millennials are the biggest fans of mobile payments: 17% — compared to 12% among Generation “Z” and 13% among Generation “X”. additionaly, men use mobile payments much more frequently than women.

➡️ In countries where mobile payments are not yet widespread, respondents said they would choose it if QR code payment was more widely available at physical points of sale.

➡️ Social networks. In addition to the fact that most small and medium-sized merchants only accept cash, it should also be noted that more than 50% of Latin Americans work informally — consequently, their employers also pay them informally: in cash.

➡️ Study recommendations for financial organizations. In short, diversify payment solutions… and, if possible, integrate them with each other.

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