A History with Low Levels of Financial Inclusion
To set up a bank account in several LAC countries, one needs to show proof of citizenship, a job, and financial paperwork. Further, banks have traditionally put the poor at a disadvantage by issuing cards with hidden fees. Although countries like Brazil and Chile have proportionally higher amounts of ATMs and bank branches, financial inclusion for the LAC region remains well below the OECD average.
The Status Quo for Payment Methods in LAC
The traditional payment methods, regulations, and customs of LAC have kept large swaths of its population segmented and away from online payments.
Access to alternative payment methods such as Paypal can be quite limited in LAC. Thus, a majority of the population is still accustomed to using the cash voucher system, credit card installments, local credit cards and bank transfers.
Even though online payment methods exist in LAC, there are several limiters on their access and usage across borders. Many countries charge high fees for cross-border online transactions. Moreover, international credit cards have been out of reach for much of LAC and are not universally accepted by merchants and stores.
Most importantly, consumers in LAC still view cash as a sign of trust. Therefore, cash remains the most popular payment method in LAC and credit cards are often only used for emergencies or large purchases.