Payments and banking transformation is going full steam ahead in Latin America and the Caribbean
To find inspiration for what’s possible in payments, look to Latin America and the Caribbean (LAC), where diverse dynamics are driving major market changes and technology innovation. In two regions where cash has long been considered king, consumer preferences are changing—challenging the existing incumbent banking industry, calling for a need to transform core infrastructure while meeting the needs of key customer segments, including Gen Z and affluent consumers.
New players in the market are changing the status quo
The average age of consumers is among the youngest compared to other markets. As one would expect of these digital natives, Gen Z consumers have high expectations when it comes to e-commerce experiences. They are driving digital wallet adoption and, as their participation in the market grows, so do card-not-present (CNP) transactions.
Fast consumer adoption and openness to adaptation provides opportunities to build digital payment experiences, and FinTech and Banking-as-a-Service (BaaS) companies, not traditional banks, are seizing them. However, because of barriers to opening an account in the first place, there’s a tendency for consumers in LAC regions to stick with a single bank, so financial institutions that are equipped to offer the same level of banking innovations as FinTechs and BaaS models have a potential advantage.
FinTech revenue in LAC is expected to grow above global averages in the next few years, driving competition worldwide. Real-time payments (RTP) networks are gaining a remarkable presence in LAC thanks to FinTech investment—Unified Payments Interface is expanding its instant mobile payment system into the Caribbean, as a case in point. The most advanced schemes, such as Pix in Brazil, are looking to add risk scoring, dispute resolution, and pay-in-installment capabilities. BaaS models are also proving very successful in Latin America, with Open Banking replacing traditional banks, which has paved the way for payments innovation.
Cater to digital-forward customers: the future of your cardholder base
To stay aligned with the digital banking trends evident in LAC and stay ahead of cardholder expectations, issuers need to design a user experience for their most digital-savvy customers and build an integrated value proposition with loyalty and benefits.
Visa is uniquely positioned to help you expand digital payments into the unified digital experiences that younger consumers demand. With the flexibility of our completely customizable APIs and quick-to-market pre-built SDKs, Visa empower your customers and institution to:
- Easily manage subscriptions and identify and stop recurring charges, helping to reduce chargebacks and disputes
- Set intuitive transaction controls to alert them to purchases over a certain threshold, foreign transactions, CNP purchases and more
- Instantly push card credentials to all major digital wallets and click-to-pay via in-app provisioning solutions
- Reduce fraudulent disputes, costly chargebacks and associated operational expenses, while enabling faster resolution and funds recovery times with our network-agnostic dispute management solutions
With Visa Consumer Engagement Solutions you get a modular, end-to-end suite of solutions to help engage and retain customers throughout their lifecycle. With affluent segments demanding more from their primary financial relationship, Visa continues to invest in benefit experiences that drive spend and create genuine engagement.
- Delight affluent customers with premium benefits, like VIP lounge access, to elevate their travel experience through Visa Airport Companion
- Provide differentiated travel support with 24/7 customer service, digital and physical card replacement and emergency cash access to further retain affluent travelers
- Deepen loyalty with personalized communications and meaningful rewards that resonate with your cardholder, from VIP experiences to unique digital collectibles powered by AR and Web3
To build, scale and deliver the digital-forward experience outlined above, issuers need a flexible and future-proof foundation and technology infrastructure. With our acquisition of cloud-native core-banking and processing microservices platform, Pismo, Visa can provide just that.
Set up for success in emerging markets
With the primary bank preference of consumers in LAC, institutions have a strong incentive to transform their core systems and deliver differentiating experiences to engage emerging and established customer segments. Visa Issuing Solutions is here to help you break free from core system constraints and deliver the captivating digital experiences that this dynamic market is hungry for now.
If you want to learn more, click here to download our latest report "How Digital Maturity is Defining Payment Trends".