Digital payment transformation passes the grandma test in Latin America

People who were previously hesitant to use mobile devices for browsing, banking, or payment have become more familiar with the process because of an inviting, easier user experience

FREMONT, CA: As a result of the pandemic, all manner of younger, tech-savvy early adopters have moved online to transact using apps and digital wallets. However, a rising number of elderly people in the region — the grandmas, in other words — have found it simple to use digital channels to conduct daily business, according to Schwarzkopf, CEO of Kushk.  He stated to simply use the grandma test to get a sense of the growth digital payments have made in Latin America.People who were previously hesitant to use mobile devices for browsing, banking, or payment have become more familiar with the process because of an inviting, easier user experience.

Significant progress has been made, in the year 2020, 81 percent of Latin Americans lacked credit cards, while 45 percent lacked bank accounts. However, 40 million unbanked consumers enrolled in financial services during the pandemic, many of whom were motivated by the need to get government-funded pandemic-related assistance. Local payment methods accounted for 83 percent of eCommerce expenditure in the region, with 60 percent of transactions being purchased in installments. Digital buying and payments are booming, and Latin American shoppers are expected to account for at least 30 percent of all buyers by 2024.

With those figures and that huge potential, digital payments, according to Schwarzkopf, are a blank canvas for all kinds of FinTechs, banks, and infrastructure providers like Kushki. This is not to imply that the runway is without flaws. Despite the fact that Latin America is still in year one of the digital transformation, challenges loom, threatening a smooth transition away from cash, most notably in the form of fragmentation. According to Schwarzkopf, Latin America is characterized by a plethora of distinct underwriting, regulatory, and compliance demands. Kushki aims to standardize integrations by bringing together a wide set of participants — both inside and outside the region — in a connected ecosystem. He told Webster that efforts by the public and private sectors to link consumers and devices have a good ripple effect.

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