Digital Wallets in Latin America: Driving Consumer Confidence

It’s not new information that digital payment methods have become consumers’ preferred choice, while cash-based options like Brazil’s Boleto are gradually losing relevance. Even in countries where financial inclusion is still growing, such as Mexico and Peru, vouchers from convenience stores like Oxxo, 7-Eleven, and PagoEfectivo are slowly losing traction. The spotlight now shines on digital wallets like Mercado Pago, NuPay, and PicPay, which have gained strong consumer preference across Latin America. 

The driving force behind this digitalisation of payments, with digital wallets as key players in this transformation, lies in the demand for more convenient and, above all, more secure payment methods. It’s also worth noting that digital wallets have played an important role in expanding financial inclusion for many people across Latin America. In addition to offering access to financial services, they have begun to provide exclusive benefits, including cashback and rewards.

Why Have Digital Wallets Become So Popular?

The rise of digital wallets has been driven by major transformations in payment processes worldwide. Their prominence is heightened by the shift towards a mobile-first society. This is seen in Latin America, where in 2023, approximately 65% of the population were using mobile internet, which is expected to rise to 72% by 2030. Today, users can open an account in just a few minutes and manage it entirely online without visiting a physical branch. In addition to the convenience of opening an account without the bureaucracy of traditional banks, digital wallets have emerged as a user-friendly interface offering proprietary payment solutions with just a few clicks. This is especially appealing to segments of the population that lacked access to more traditional payment tools, such as credit cards. 

Solutions like Mercado Pago and Brazil’s PicPay are great examples of this evolution, playing a crucial role in increasing financial inclusion for many Latin Americans. Mercado Pago, for example, reached 61.2 million unique active users, according to its 2024 earnings in the fourth quarter, while PicPay,- despite operating only in Brazil, hit 59 million customers as of December last year.

While the ease of digital wallet account creation fueled rapid adoption, exclusive benefits like cashback, interest earned on wallet balances, and their evolution into “super apps” have further accelerated this trend. These wallets now offer services like mobile phone top-ups, public transport cards, and even their own marketplaces with partner discounts. NuPay, for example, now offers a Buy Now, Pay Later solution, allowing users to split purchases into up to 24 installments without needing a credit card. All of this has helped build consumer trust and preference for digital wallets, many of which have become users’ primary financial accounts.

Another favourable attribute of digital wallets is the security they offer. According to a Mastercard survey conducted in 14 countries across Latin America and the Caribbean, 83% of consumers indicated that security features are the most influential factor when choosing a payment method, followed by the protection of financial information, cited by 79%.

Solutions such as data tokenisation and two-factor authentication have met consumers’ demand for safer payments by reducing exposure and preventing leaks of sensitive data. These features have further established digital wallets as consumer favourites across Latin America.

The Relevance of Digital Wallets in Latin America

When looking at digital wallet usage across Latin America, Brazil stands out. The country led the payment digitisation wave with Pix, which in 2024 accounted for 22% of all e-commerce transactions across Latin America, according to PCMI data. Digital wallets follow closely behind, making up 10% of all transactions in the region.

For many users, digital wallets are their first-ever financial accounts, introduced through these providers. Additionally, wallets have driven the growth of Real-Time Payments (RTPs) — like Pix in Brazil, which is the primary funding source for wallets — and India’s UPI, a similar system that fuels wallets like PhonePe and Paytm.

Digital wallets also support the use of credit and debit cards. It’s important to distinguish two main types of wallets: those that hold a balance (competing with credit cards) and tokenised wallets that store card credentials, like Apple Pay and Google Pay, which process payments using linked credit cards.

Digital Wallet Adoption by Country

When analysing the share of digital wallets as a payment method in e-commerce by country, we notice a common average of 8% across most Latin American countries. This highlights how digital wallets have played a crucial role in the region, despite each country being at a different stage of economic development and financial inclusion.

In Brazil and Chile, they represent 7% of online transactions. In Peru and Mexico, that number reaches 10%, with Mexico expected to grow at a 29% CAGR from 2024 to 2027. In Colombia, wallets account for 5% of online purchases but go as high as 18% for in-person payments.

Argentina, however, is far above the regional average, with digital wallets accounting for 46% of all payments. The country’s economic instability drives consumers to avoid keeping money in traditional bank accounts. Instead, they turn to wallets like Mercado Pago and Ualá, which offer automatic interest on balances and allow users to invest their funds in instruments tied to government interest rates, with daily liquidity.

More Payment Methods, More Sales Conversions

The emergence of diverse payment solutions that meet various customer needs creates more opportunities to drive conversions. That’s why it’s essential to partner with companies like Unlimit, which offers thousands of payment methods from around the world — including the leading digital wallets in Latin America — for your e-commerce business.