Vlaicu, Raz an
Wo king Pape
Digi al paymen s adop ion by consume s and i ms:
Implica ions o inancial inclusion
IDB Wo king Pape Se ies, No. IDB-WP-1705
P o ided in Coope a ion wi h:
In e -Ame ican De elopmen Bank (IDB), Washing on, DC
Sugges ed Ci a ion: Vlaicu, Raz an (2025) : Digi al paymen s adop ion by consume s and i ms:
Implica ions o inancial inclusion, IDB Wo king Pape Se ies, No. IDB-WP-1705, In e -Ame ican
De elopmen Bank (IDB), Washing on, DC,
h ps://doi.o g/10.18235/0013575
This Ve sion is a ailable a :
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Digi al Paymen s
A
dop ion by Consume s
and Fi ms:
Implica ions o Financial Inclusion
Raz an Vlaicu
WORKING PAPER No IDB-WP-1705
In e -
A
me ican De elopmen Bank
Depa men o Resea ch and Chie Economis
June 2025
* In e -
A
me ican De elopmen Bank
Digi al Paymen s Adop ion by Consume s
and Fi ms:
Implica ions o Financial Inclusion
Raz an Vlaicu*
In e -
A
me ican De elopmen Bank
Depa men o Resea ch and Chie Economis
June 2025
Ca aloging-in-Publica ion da a p o ided by he
In e -Ame ican De elopmen Bank
Felipe He e a Lib a y
Vlaicu, Raz an.
Digi al paymen s adop ion by consume s and i ms: implica ions o inancial
inclusion / Raz an Vlaicu.
p. cm. — (IDB Wo king Pape Se ies ; 1705)
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Technological inno a ions-Mexico. I. In e -Ame ican De elopmen Bank.
Depa men o Resea ch and Chie Economis . II. Ti le. III. Se ies.
IDB-WP-1705
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Abs ac *
Digi al paymen s ha e inc easingly been adop ed by consume s and i ms in La in
Ame ica and he Ca ibbean. This policy esea ch pape analyzes ecen pos -
pandemic da a on digi al paymen s in he egion o desc ibe adop ion pa e ns,
measu e adop ion gaps, and iden i y adop ion ba ie s. The da a e eal a posi i e
end in he use o inancial accoun s o ecei ing wages, and o paymen apps and
digi al walle s o pu chases in-pe son and online. Despi e inc eased a e age
adop ion, sizable gaps emain bo h be ween coun ies and wi hin coun ies. A he
consume le el, ac o s associa ed wi h delayed adop ion include low income, old
age, indigenous s a us, and u al loca ion. A he i m le el, ac o s include small
size, e ail sec o , and limi ed c edi access. Fou ypes o adop ion ba ie s appea
o be impo an : echnological, economic, in o ma ional, and beha io al. These
obse a ions a e suppo ed wi h de ailed mic oda a om Mexico. The pape
p oposes policy solu ions o achie ing digi al paymen s inclusion o ulne able
consume s and i ms.
JEL classi ica ions: D18, G23, G50
Keywo ds: Digi al paymen s, Adop ion gaps, Adop ion ba ie s, Financial
inclusion
* The pape bene i ed om inpu and commen s by colleagues om RES, CMF, and DVF di isions, and an anonymous
e iewe . San iago Deamb osi and Se gio Ga bay p o ided esea ch assis ance. The indings and in e p e a ions in
his pape a e hose o he au ho and do no necessa ily e lec he iews o he In e -Ame ican De elopmen Bank o
he go e nmen s i ep esen s. Au ho con ac in o ma ion: Resea ch Depa men , In e -Ame ican De elopmen Bank,
1300 New Yo k A e NW, Washing on, DC 20577, Uni ed S a es. Email: [email protected] g.
2
1. In oduc ion
As In e ne pene a ion has g own, digi al echnologies a e inc easingly employed o acili a e a
wide ange o economic ansac ions in La in Ame ica and he Ca ibbean (LAC). The end s a ed
be o e he Co id-19 pandemic and has con inued unaba ed pos -pandemic. Pu chases, sales,
pay oll, and ans e s ha e been g adually ansi ioning o online pla o ms and a e being ini ia ed
om In e ne -connec ed sma phones, able s, o compu e s. While he end was o be expec ed
o online comme ce, in-pe son ansac ions a e also elying mo e on digi al paymen s. As
consume s and i ms make and ecei e paymen s digi ally, bo h online and o line, he demand o
cash by consume s and accep ance o cash by i ms declines. In his new digi al economy,
consume s and i ms lacking he de ices and knowledge o making and ecei ing digi al paymen s
may be es ic ed om accessing he ull ange o economic oppo uni ies.
The abili y o make and ecei e digi al paymen s is a basic s ep owa d inancial inclusion
in an inc easingly digi al economy. In LAC cu en ly, one in i e adul s a e s ill cash-only
consume s, and only one in h ee can be conside ed ully inancially included (Mas e ca d AMI,
2023). In he con en ional economy, being inancially included was adi ionally de ined as ha ing
a bank accoun (Wo ld Bank, 2012). Being a bank cus ome ga e a consume o i m access o
basic inancial se ices such as deposi s and paymen s. This c ea ed a cus ome his o y and a
banking ela ionship ha opened he doo o mo e complex inancial se ices, such as c edi and
loans.
In he new digi al economy, howe e , inancial se ices may be also p o ided by nonbank
ins i u ions, such as in echs o online me chan s. These p o ide s o e nonbank ansac ion
accoun s in he o m o digi al walle s o paymen apps (IDB, 2022). Digi al-based al e na i es o
adi ional bank accoun s c ea e an excellen oppo uni y o expand inancial inclusion o
ulne able g oups wi h limi ed access o banking in as uc u e, such as u al communi ies. On he
o he hand, because o he complexi ies o new echnologies and he necessa y beha io al
adjus men s, o he ulne able g oups acing highe adjus men cos s, such as he elde ly, may be
excluded. In a digi al economy whe e cash is no longe widely accep ed and banks sh ink hei
physical b anch ne wo ks, cash-dependen indi iduals incu ansac ion cos s and may isk losing
3
access o a ange o se ices. Thus, i is impo an o unde s and bo h he oppo uni ies and he
cons ain s coming om he demand side o digi al paymen s.1
Se e al ques ions guide he analysis in his pape . How ha e he paymen choices o
consume s and i ms changed pos -pandemic? Wha ypes o new digi al paymen ins umen s
ha e become a ailable, and which ones end o be mo e widely adop ed? Who a e he use s ha
s ill ely hea ily on cash and a e leas inclined o ansi ion o he new paymen s ecosys em? Wha
ypes o ba ie s p e en b oade adop ion o digi al paymen s? And inally, wha can go e nmen
ins i u ions and inancial p o ide s do o mi iga e and o e come hese ba ie s? The objec i es o
his policy esea ch pape a e o: discuss key issues in he con ex o he exis ing li e a u e,
highligh impo an pa e ns in he da a ha aise new esea ch ques ions, and ad ance policy ideas
o imp o emen s in digi al paymen s inclusion ha add economic alue o consume s and i ms.
This pape uses ecen da a and e iews new de elopmen s in he digi al paymen s
ecosys em in LAC o p o ide insigh s on ou poin s: adop ion, gaps, ba ie s, and policies. In
e ms o adop ion, he pape looks a ecen ends in usage by consume s and i ms, ocusing on
iden i ying he use s ha ha e no ye swi ched om cash eliance o digi al solu ions. The da a
e eal an upwa d end pos -pandemic in he use o inancial accoun s o ecei ing wages, and o
paymen apps and digi al walle s o daily consume expenses in-pe son and online. Despi e he
upwa d ends, sizable gaps emain bo h ac oss coun ies and wi hin coun ies. Ac oss he egion,
mos o he adul popula ion p e e s elec onic paymen s o e cash; howe e , coun ies di e
ma kedly in le els o adop ion. A he consume le el, ac o s associa ed wi h delayed adop ion
include low income, old age, indigenous s a us, and u al loca ion, all ma ke s o ulne able
g oups. A he i m le el, he ac o s a e small size, e ail sec o , and limi ed c edi access.
Nex , he pape seeks o cha ac e ize he ba ie s ha delay digi al paymen s inclusion.
Fou ypes o ba ie s appea o be impo an : echnological, economic, in o ma ional, and
beha io al. On a e age ac oss coun ies, he main ba ie s o adop ion appea o be connec i i y,
due o insu icien in as uc u e a ailabili y; swi ching cos s, due o limi ed me chan
accep abili y, low digi al capabili ies and inancial li e acy, as well as usage ic ions o habi
o ma ion; and inally, conce ns abou digi al ansac ion p i acy and secu i y. These obse a ions
1 Digi al paymen ools gene a e al e na i e da a ha can suppo inno a i e c edi sco ing models using A i icial
In elligence (AI) algo i hms (Beck e al., 2022; Vlaicu, 2024). C edi access is an essen ial componen o inancial
inclusion. T adi ional unde w i ing and abili y- o-pay assessmen s, howe e , ha e closed o many consume s om
c edi oppo uni ies ha enhance inancial well-being and economic esilience.
4
a e suppo ed wi h de ailed mic oda a om Mexico. The pape concludes wi h policy solu ions o
acili a ing digi al paymen s adop ion by ulne able consume s and i ms, among hem
imp o emen s in in as uc u e, balanced and upda ed s anda ds and egula ions, widely accessible
public educa ion and social suppo o inancial li e acy and digi al capabili y, and use -cen e ed
design and cus omiza ion p omo ing digi al and inancial us .
The las i e yea s ha e wi nessed majo changes in he inancial sec o , d i en by a high
pace o inno a ion in digi al echnologies. Du ing his pe iod, LAC has expe ienced a doubling o
inancial echnology ( in ech) i ms, he in oduc ion o eal- ime paymen sys ems in se e al
coun ies, and no el uses o digi al mechanisms o disbu sing social bene i s, among o he
de elopmen s. Consume s and i ms ha e esponded o he new ecosys em by adop ing digi al
o ms o paymen a a high a e, wi h impo an bene i s in e ms o expanded accessibili y, highe
speed, and lowe ees. These ends p esen a new oppo uni y o expand and deepen inancial
inclusion, as he new ools a e da a- ich and educe some o he main in o ma ional cos s o
p o iding inancial se ices. A he same ime, new isks a ise, including he exclusion o ce ain
ulne able g oups, and challenges ela ed o cybe secu i y, aud, and da a p i acy. How
go e nmen s na iga e his p ocess o change has i s -o de implica ions o consume wel a e and
i m g ow h in he egion.
2. Adop ion o Digi al Paymen s
The Co id-19 pandemic was a pi o al e en o he paymen s sec o a ound he globe (Wo ld Bank,
2022). Because o dis up ions o ace- o- ace comme ce, many consume s and i ms shi ed o
online shopping, which is mo e dependen on emo e o ms o paymen . The e o e, digi al
ansac ions inc eased as e han cash ansac ions. Tha was he case in LAC, as well. In he
a e ma h o he pandemic, howe e , has he e been a e e sion o cash o has he adop ion and use
o digi al paymen s con inued?
Acco ding o Wo ldPay da a, he agg ega e ansac ion alue o in-pe son shopping in LAC
inc eased a a a e o abou 11 pe cen pe yea du ing he 2020-2024 pe iod, while online shopping
inc eased wo-and-a-hal imes as e , a 27 pe cen pe yea . The e o e, on a e age, a la ge sha e
o consume paymen s has mo ed online. A he same ime, he e has been a shi in he
composi ion o paymen s o bo h ypes o comme ce, wi h a g ea e p esence o digi al paymen s
bo h in-pe son and online. The ends in paymen ypes pos -pandemic a e shown in Figu e 1,
5
based on Wo ldPay ansac ions da a om he la ges economies in he egion. I dis inguishes
be ween cash, ca ds, and digi al. The le panel shows he b eakdown among paymen me hods
used o in-pe son shopping. The igh panel shows he b eakdown o online shopping. In bo h
cases, he e has been an inc ease in he pe cen age digi al paymen s, conduc ed h ough such ools
as paymen apps o digi al walle s. Digi al paymen s ha e been cap u ing a la ge ma ke sha e
away om cash as well as debi and c edi ca ds.
Making o ecei ing paymen s digi ally equi es a ansac ion accoun : a deposi o cash
balance accoun ha can s o e, ecei e, and send unds. P e e ably, a ansac ion accoun would
no limi he numbe o ansac ions ha he accoun holde can make and mus p o ide ela i ely
un es ic ed and cos less access o accoun unds. Common ypes o ansac ion accoun s wi h
minimal es ic ions and cos s include bank and c edi union checking accoun s, in ech digi al
deposi accoun s, and nonbank accoun s wi h online paymen se ice p o ide s. T ansac ion
accoun s wi h highe es ic ions and cos s include debi ca ds, gene al pu pose eloadable (GPR)
Figu e 1
: Digi al Paymen s Expanded Pos
-
Pandemic
No e
: Based on da a om Wo ldPay
Global Paymen s Repo
2021 and 2025. Digi al paymen s
include Digi al/Mobile Walle s, A2A eal- ime ans e s and di ec debi s o a bank accoun ,
BNPL/POS Financing like Pos Pay and Buy now Pay La e me hods and o he me hods like
P ePay and C yp ocu encies. Ca d paymen s include C edi , Debi , P epaid and Cha ge Ca ds.
Da ase co e s A gen ina, B azil, Chile, Colombia, Mexico and Pe u.
12
sales. The igh panel shows ha digi al ansac ion cos s incu ed by i ms a y om 1 pe cen o
5 pe cen .9
Wi hin coun ies, a ia ion in digi al paymen s adop ion ac oss consume s and i ms is
in luenced by geog aphic, economic, acial, and cul u al ac o s. U ban popula ions end o adop
digi al paymen s mo e eadily due o be e in as uc u e, highe sma phone pene a ion, and
g ea e access o inancial se ices. In con as , u al communi ies o en ace ba ie s like limi ed
in e ne connec i i y and ewe banking op ions, which hinde hei abili y o use digi al paymen
sys ems. Younge gene a ions a e ypically mo e inclined o emb ace digi al paymen s, d i en by
amilia i y wi h echnology and mobile apps, while olde indi iduals may p e e adi ional
paymen me hods due o conce ns abou secu i y o lack o digi al li e acy. Addi ionally, women
9 By compa ison, Value Added Tax (VAT) a es in he egion a e age a ound 15 pe cen , wi h a ange be ween 9-22
pe cen .
Figu e 5
: Consume Gaps in Digi al Paymen Adop ion
No e
: Based on da a om La inoba ome o 2023. Fo ou come a iables and coun ies co e ed, see
no e o Table 3. High educa ion de ined as comple ed seconda y school. High SES includes
indi iduals whose socioeconomic le el, assessed by he in e iewe , is good o e y good. Ranges
a he end o he ba s ep esen 95% con idence in e als.
13
and mic o, small, and medium-sized en e p ises (MSMEs) a e inc easingly adop ing digi al
paymen s as hey gain access o inancial inclusion ini ia i es and ailo ed solu ions.
La inoba óme o su ey da a e eal la ge gaps in consume usage o elec onic paymen s
(including digi al paymen s) ac oss economic, demog aphic, and geog aphic ac o s. Figu e 5
depic s es ima ed gaps a e aged ac oss he 18 coun ies in he sample. The op panel o Figu e 5
indica es ha he g oups ha lag behind a e cha ac e ized by low income and low educa ion, old
age, indigenous, and u al loca ion. In some cases, he gaps exceed 50 pe cen di e ence. These
a e g oups adi ionally excluded om o mal inancial se ices in LAC (C edico p, 2024).10
These da a indica e ha , despi e mo e o a decade o gains in pa icipa ion in o mal
inancial se ices, signi ican gaps emain. I unde sco es he impo ance o unde s anding he
10 C ouze e al. (2024) de elop a o mal model and epo e idence o he ole o age and o he demog aphics in he
adop ion o mobile paymen s in India.
Figu e 6
: Fi m Gaps in Digi al Paymen Adop ion
No e
: Based on da a om he Wo ld Bank En e p ise Su ey 2023. Fo ou come
a iables and
coun ies co e ed, see no e o Table 4. Small de ined as less han 20 wo ke s. C edi includes i ms
ha applied o a c edi o loan. Female de ined as 50% o mo e o he owne s a e emale. Expo e
i 10% o mo e o hei sales a e expo ed di ec ly. Capi al de ined as i m loca ed in he capi al ci y
a ea
.
Ranges a e
95% con idence in e als
.
14
na u e and causes o hese gaps o in o m policy ac ion. The bo om panel o Figu e 5 shows gaps
in consume p e e ences o elec onic paymen s. I is no able ha p e e ence di e ences ack
usage di e ences, howe e , he gaps in p e e ences a e less ma ked, again sugges ing ha demand
o non-cash paymen s may no be he main cons ain o b oade adop ion.
Tu ning o gaps in digi al paymen s usage among i ms in LAC, Figu e 6 based on ecen
Wo ld Bank su eys o i ms, sugges s he di e ences a e less p onounced han among consume s.
The op panel o Figu e 6 shows he ypes o i ms less likely o use digi al paymen s o sales and
pu chases: small i ms, e ail i ms, non-expo e i ms, and i ms loca ed ou side he capi al ci y
me opoli an a ea. The bo om panel o Figu e 6 sugges s no signi ican di e ences in cos o i ms’
digi al ansac ions, wi h he excep ion o emale- un i ms, which appea o enjoy lowe cos s.11
4. Adop ion Ba ie s
Se e al ypes o ba ie s may es ic he b oade adop ion o digi al paymen me hods in LAC.
Some ba ie s o igina e on he supply side, while o he s come om he demand side. Access o he
necessa y echnology, like sma phones o eliable in e ne , emains an obs acle, pa icula ly in
u al o low-income a eas. The di ec cos s associa ed wi h digi al ansac ions, such as ees o
using pla o ms o se ices, discou age adop ion, as well as limi ed in e ope abili y among
paymen se ices p o ide s.
A he consume and i m le el, a signi ican challenge emains he lack o us in inancial
ins i u ions and digi al pla o ms, s emming om conce ns abou secu i y, aud, and economic
ins abili y which ends o inc ease he demand o cash. Some o hese pe cep ions may e lec he
ela i e no el y o hese echnologies which c ea e lack o awa eness abou he po en ial bene i s
and ac ual secu i y o digi al paymen s. Many indi iduals also ace limi ed digi al capabili y o
inancial li e acy, which p e en s hem om unde s anding and u ilizing digi al paymen sys ems
e ec i ely. Las ly, cul u al p e e ences o cash and a gene al esis ance o change u he slow he
ansi ion o digi al paymen s.
Adop ion ba ie s, he e o e, can be ca ego ized in o a leas ou ypes: echnological,
economic, in o ma ional, and beha io al. Technological ba ie s a e limi ed supply o echnology
11 Small local i ms, including ag icul u al i ms, a e mo e dependen on ela ionship banking buil on so in o ma ion
ha may no always ansla e in o digi al o ma . A s udy in B azil ound ha he closu e o bank b anches educed
es ablishmen s wi h ac i e ope a ions by up o 8 pe cen and o mal employmen by 0.5 weekly hou s, wi h mic o and
ag icul u al i ms being he mos a ec ed (Fang and Vlaicu, 2024).
15
necessa y o he smoo h ope a ion o digi al paymen s, such as connec i i y in as uc u e, eliable
inancial ne wo ks, o inancial so wa e applica ions o sma phones. Economic ba ie s a e he
cos s and ees associa ed wi h adop ion and use o digi al paymen s. In o ma ional ba ie s a e
limi ed awa eness abou a ailable new digi al paymen s op ions and knowledge abou how o use
hem. Finally, beha io al ba ie s a e s a us quo bias due o habi o ma ion, biased pe cep ions,
and lack o us in ei he he paymen echnology i sel o he banks and in echs ha p o ide i .
Examining ecen da a helps shed u he ligh on hese ac o s o be e delinea e he na u e
o adop ion ba ie s. Da a om C edico p Ipsos Pe u based on consume su eys conduc ed in
eigh coun ies in he egion yea ly a e he Co id-19 pandemic p o ide an oppo uni y o examine
ends in ac o s ha may hinde consume s om using digi al paymen s. The le panel o Figu e
7 shows ends in po en ial ba ie s o he pe iod 2022-2024. In e ms o le els, lacking a mobile
Figu e 7
: Consume Ba ie s
and
Digi al Paymen Adop ion
T ends
No e
: Based on da a om C edico p Ipsos and GSMA. Lack o knowledge de ined as no ha e
hea d o mobile walle s and digi al paymen s apps as a inancial p oduc . Lack o secu i y de ined
as hesi a ion o using digi al paymen s o make ansac ions. Lack o us de ined as money no
being sa e in inancial en i ies. Lack mobile phone de ined as no owning a mobile phone. Es ima e
o 2024 ex apola ed using he a e age annual g ow h a e o he yea s 2020-2023. Es ima es a e
equal-weigh ed a e ages ac oss eigh coun ies: A gen ina, Boli ia, Chile, Colombia, Ecuado ,
Mexico, Panama and Pe u.
16
phone is he leas s ingen ba ie , a ec ing unde 20 pe cen o he popula ion, whe eas lack o
knowledge is he mos common, a ec ing o e 40 pe cen o he popula ion. Pe cei ed lack o
secu i y o digi al ansac ions and lack o us in inancial ins i u ions a e ele an o abou 30
pe cen o he popula ion. In e ms o ends, a s eep decline o mo e han 10 pe cen age poin s is
no iceable in he knowledge ba ie . The phone owne ship ba ie has also elaxed o e ime. On
he o he hand, conce ns abou digi al secu i y and inancial ins i u ions appea mo e pe sis en .
These ba ie s no wi hs anding, he e is clea g ow h in adop ion and usage, suppo ed by
s ong posi i e ends in he alue consume s associa e wi h paymen apps and mobile walle s. See
he igh panel o Figu e 7. Owne ship o hese o ms o paymen has inc eased mo e han
h ee old, om 11 pe cen in 2021 o 36 pe cen in 2024. Abou hal o hose who ha e hese ools
on hei sma phone also use hem egula ly. The posi i e end appea s in e e y coun y in he
s udy. A he same ime, sizable di e ences in adop ion ac oss coun ies should be no ed. As o
2024, A gen ina (65 pe cen ) and Panama (63 pe cen ) lead in adop ion o digi al walle s, whe eas
Chile (20%) and Mexico (11%) a e a a conside ably lowe le el o digi al walle adop ion, ins ead
leading in he adop ion o debi ca ds.
O he su eys ask consume s di ec ly he easons why hey do no ake ad an age o digi al
paymen s echnology. In 2024, Mas e ca d conduc ed a su ey in collabo a ion wi h PCMI in six
coun ies in he egion. The esul s a e p esen ed in Table 2. The op h ee easons gi en o no
using a mobile phone o inancial ansac ions such as paymen s and ans e s we e lack o
in e es , lack o us in he digi al paymen o ma , and lack o unde s anding and knowledge o
he wo kings o he paymen s and ans e s echnology.
Table 2: Top Ba ie s o Adop ing Digi al Paymen s
Consume Ba ie s
Lack Need/In e es Using Phone o Financial T ansac ions
Don’ T us he Digi al Paymen Fo ma
Don’ Unde s and/Know How o Use Technology
No Enough Phone Da a
Businesses Do No Accep Phone-Based Paymen s
51%
28%
15%
7%
7%
No e
: Based on su ey da a om Mas e ca d PCMI (2024). Pe cen ages e lec
esponden s who selec a gi en eason why hey a e no using a mobile phone
o pay o se ices o o send o ecei e money. Sample consis s o 1,848
indi iduals. Es ima es a e equal-weigh ed a e ages ac oss six coun ies:
A gen ina, B azil, Chile, Colombia, Mexico, and Pe u.
17
Consume conce ns abou digi al accoun and ansac ion secu i y a e no un ounded.
Financial aud is an ongoing p oblem in LAC, es ima ed a 20 pe cen o o al e-comme ce
e enue by Mas e ca d, he second highes among wo ld egions a e Asia. Consume s a e mo e
exposed o accoun akeo e (ATO) aud and ha e ewe mechanisms o dispu e esolu ion wi h
digi al paymen s han wi h ca ds. In 2022, 44 pe cen o ATO ic ims we e de auded up o i e
imes, and ATO a emp s inc eased 131 pe cen du ing ha pe iod. Wi h eal- ime paymen s a
common scam is he au ho ized push paymen (APP) whe e auds e s use social enginee ing o
nudge he ic im o ini ia e a paymen . B azil epo ed losses o APP scams o 1 pe cen o PIX e-
comme ce. Balancing he adeo be ween paymen speed and aud p e en ion is an ongoing
challenge o pla o ms and egula o s.12 On he posi i e side, a secu e digi al paymen s
in as uc u e can enhance he secu i y o go e nmen o pe son (G2P) paymen s o social bene i s.
An e alua ion o India’s ansi ion o digi al ans e paymen s ound ha i signi ican ly educed
leakage om wo la ge an ipo e y p og ams (Mu alidha an e al., 2016).
Tu ning now o he i m side, egion-wide su eys o i m ba ie s o digi al paymen s
adop ion a e no a ailable. Fu u e su ey esea ch on his ques ion could be aluable. The as
majo i y o i ms in he egion a e in he MSME ca ego y. These i ms ace se e al ba ie s o
adop ing digi al paymen s. Reliable access o mobile b oadband o paymen ha dwa e like POS
e minals o QR eade s may no be eadily a ailable o may be cos p ohibi i e. As in he case o
consume s, awa eness o a ailable inancial se ices and he knowledge o use hem is as impo an
as access o in as uc u e. En enched mis us in he o mal inancial sys em and in o mali y can
lead me chan s o miss oppo uni ies o digi alize hei business, es ablish an online p esence, o
upg ade hei cu en ope a ions. Fi ms may also ace beha io al ba ie s, such as p esen bias and
limi ed memo y. An in e en ion in Mexico whe e i ms ecei ed educed-cos o e s o adop
digi al paymen s h ough a p i a e in ech ound ha eminde s inc eased ake-up by 15 pe cen
on a e age, and deadlines inc eased ake-up by 8 pe cen o smalle i ms (Ge le e al., 2025).
O e ly s ic and cumbe some know-you -cus ome (KYC) equi emen s a e ano he
ba ie o MSME pa icipa ion in he digi al inancial sys em. As a s anda d due diligence p ocess,
KYC equi es banks o e i y he iden i y and assess he isk ac o s associa ed wi h opening
accoun s o p ospec i e clien i ms. KYC p ocesses in he egion ely on in-pe son, pape -based
12 A i icial In elligence (AI) capabili ies o c ea e deep akes posing as eal people and opening ake accoun s may
u he complica e e o s o ein in digi al aud.
18
o mali ies, which can be a ba ie o i ms ope a ing in u al a eas o o sel -employed indi iduals
who may no ha e go e nmen -issued iden i ica ion o knowledge and skills o ill ou long pape
o ms (IDB and WEF, 2022).
A lack o in e na ionally ecognized s anda ds like he ISO messaging s anda ds and
EMVCo can add ic ion o ansac ions, inc easing cos s o me chan s and educing adop ion.
Fo example, he Mexican QR paymen amewo k CoDi uses domes ic s anda ds a he han EMV
in e na ional s anda ds, which likely con ibu ed o low adop ion by nonbank ins i u ions and
MSMEs. In he Ca ibbean, weak in e ope abili y be ween digi al paymen s sys ems has sus ained
he con inued p e e ence o cash. Fo example, money can be held i ually in a mobile accoun
o e en a digi al walle , bu he amewo k is no ye in place o allow o he easy ans e om
hese ypes o accoun s o a debi o a c edi ca d accoun (Ma ius, 2021).
5. Case S udy: Demand o Digi al Paymen s in Mexico
To be e unde s and he cha ac e is ics o he slow adop e s and he easons ha delay hei
inclusion in digi al paymen s, his sec ion p esen s a mo e de ailed analysis o he la es mic oda a
om Mexico. This is an in e es ing case because Mexico is one o he la ges and mos di e si ied
economies in LAC, ea u ing ib an ech and inancial sec o s, ye b oad-based digi aliza ion o
paymen s has been ela i ely slow and une en. The da ase s employed in his sec ion a e na ionally
ep esen a i e su eys o household income (ENIGH), inancial inclusion (ENIF), and in o ma ion
echnology access (ENDUTIH).
Mexico's digi al paymen s ecosys em has unde gone signi ican ans o ma ions in ecen
yea s, d i en by echnological inno a ion, go e nmen in e en ions, and he as expansion o
online comme ce. Mexico’s in ech sec o ea u es nea ly 1,000 companies. O e he pas i e
yea s, he domes ic sec o has wi nessed imp essi e g ow h, wi h a no able compound annual
g ow h a e o 18.4 pe cen in he numbe o s a ups. In addi ion, he cen al bank de eloped wo
public eal- ime paymen sys ems. CoDi (Cob o Digi al, launched in 2019) is a QR (quick
esponse) code-based sys em designed o acili a e small ansac ions. DiMo (Dine o Mó il,
launched in 2023) simpli ies pe son- o-pe son (P2P) and business- o-business (B2B) ans e s by
linking bank accoun s using sma phone numbe s. Mobile walle s and blockchain echnologies a e
also gaining ac ion. Mexico has he second-la ges online ma ke place, a e B azil, and i s
19
g ow h is helping o educe cash dependence, as mo e consume s emb ace online shopping and
digi al paymen op ions.
Despi e hese ad ancemen s, digi al paymen s pene a ion emains lowe in Mexico han
in coun ies a simila le els o economic de elopmen . Acco ding o ENIF 2024, cash is s ill he
p e e ed paymen me hod o he majo i y o consume s, and abou 37 pe cen o Mexico’s
popula ion lacks a bank accoun . This eliance on cash unde sco es he need o accessible,
a o dable, and sa e inancial se ices, pa icula ly in u al and low-income a eas.
Consume adop ion o digi al paymen me hods in Mexico is below he a e age o he
LAC egion. The op panel o Figu e 8 shows es ima es o he pe cen age o he popula ion ha
used digi al paymen s o ei he in-pe son o online pu chases, o bo h, in he las h ee mon hs
be o e he su ey. Less han a qua e o he popula ion, abou 23 pe cen , epo ed being use s.
The bo om panel o Figu e 8 p esen s he pe cen age o he popula ion epo ing ha businesses
Figu e 8
: Digi al Paymen Usage by Consume s and Accep ance by Fi ms
No e
: Based on da a om
Encues a Nacional de Inclusión Financie a (ENIF) 2024 Mexico.
Usage
o Digi al Paymen s is pe cen age o indi iduals who pay digi ally o ei he in-pe son o online
pu chases in he las h ee mon hs be o e he su ey. Accep ance o Digi al Paymen s is he
pe cen age o indi iduals ha epo ha mos (all o almos all), some (some o a ew) o none
(none o doesn' know) o he businesses whe e he indi idual egula ly shops accep digi al
paymen s. Sample size o usage: 13,122 households. Sample size o accep ance: 13,502
households.
20
whe e hey egula ly shop accep digi al paymen s. Fo abou 44 pe cen o he popula ion,
me chan accep ance is common, and o ano he 40 pe cen digi al paymen s a e accep ed by a
leas some o he businesses whe e hey shop. F om hese da a, i appea s ha me chan accep ance
may no a binding cons ain .
Consume s may p e e o use digi al paymen s o pa icula ypes o ansac ions, hus
pene a ion may di e depending on whe e he ansac ion akes place. The le panel o Figu e 9
shows he p e alence o di e en ypes o ansac ions in Mexico. Re ail pu chases a e he mos
equen , pa icula ly in small s o es, ollowed by u ili y bills and anspo a ion paymen s. Online
shopping is a equen ansac ion o less han a hi d o esponden s.
The igh panel o Figu e 9 shows ha cash is s ill he mos common paymen o m o in-
pe son ansac ions ( i s ou ca ego ies). Howe e , debi and c edi ca ds also ha e signi ican
usage a la ge e aile s (second ca ego y), and digi al paymen s a e mo e common o paying u ili y
bills ( hi d ca ego y). Fo online shopping, digi al paymen s su pass ca ds and cash; almos 60
pe cen o esponden s epo usage. As mo e comme cial ac i i y is mo ing online, i is expec ed
ha digi al paymen s adop ion among consume s will expand, wi h po en ial spillo e e ec s o
in-pe son ansac ions.
Figu e 9
: Fo ms o Paymen o Di e en T ansac ion Types, Mexico 2024
No e
: Based on da a om ENIF 2024. Le panel shows he pe cen age o indi iduals who made a
paymen in any gi en ca ego y. Small e ail includes local ma ke s, bu che shops, ha dwa e s o es,
beau y salons, e c., while la ge e ail includes supe ma ke s, depa men s o es, pha macies, e c.
T anspo a ion includes bo h p i a e and public se ices, including axis, Ube , Didi, me o, bus, e c.
Online shopping consis s o pu chases made on mobile phones o h ough he in e ne on si es such as
Amazon, Me cado Lib e, Shein, e c. Ca ds e lec s physical use o debi o c edi ca ds. Digi al paymen s
consis o elec onic ans e s o mobile apps. The sample consis s o 13,502 indi iduals esponding on
behal o hei household. Es ima es a e weigh ed using na ionally ep esen a i e indi idual weigh s.
21
Digi al paymen adop ion among Mexican consume s is low on a e age, ep esen ing less
han a qua e o he popula ion, as shown in Figu e 8. Adop ion, howe e , di e s ma kedly ac oss
economic and demog aphic cha ac e is ics. Figu e 10 p esen s gaps in digi al paymen adop ion
o consume s, in he op panel, and o i ms, in he bo om panel. Fo consume s, low adop ion
is associa ed wi h low socio-economic s a us, low educa ion, in o mal employmen , elde ly,
emale, indigenous, and u al loca ion.
Fo small i ms, low accep ance o non-cash paymen s (including digi al paymen s) is
associa ed wi h small size, e ail sec o , non-home based es ablishmen , ag icul u al ac i i y, and
Figu e 10
: Gaps in Digi al Paymen s Adop ion, Mexico 2024
No e
:
Based on da a om Encues a Nacional de Inclusión Financie a (ENIF) 2024 and Encues a Nacional
de Ing esos y Gas os de los Hoga es (ENIGH) 2022 Mexico. Top panel shows sha e o each subg oup
ha made a paymen using a ans e o mobile app in he h ee mon hs p io o he su ey. Bo om panel
shows he sha e o household i ms ha accep ans e s, di ec deposi s, o mobile paymen s. High-
income indi iduals a e hose abo e he median; o mal wo ke s a e hose wi h access o heal hca e plans
h ough hei employmen ; unde 60 e e s o indi iduals aged 18–59; and u al a eas a e hose wi h unde
15,000 popula ion. ENIF sample consis s o 13,502 indi iduals esponding on behal o hei households.
Es ima es weigh ed using na ionally ep esen a i e indi idual weigh s. La ge i ms a e hose wi hin he
op h ee deciles o expendi u e in he pas imes e ; non- e ail household i ms a e non-ag icul u al
indus ial o se ice i ms; and u al a eas a e hose wi h ewe han 2,500 people. ENIGH sample
consis s o 41,110 household i ms. Es ima es weigh ed using indi idual weigh s o i m owne . Ranges
a e
95% con idence in e als
28
Tailo ed solu ions ha add ess speci ic segmen needs and li es yles o e he po en ial o enhance
p oduc ele ance and usabili y (Mas e ca d PCMI, 2024).
In o ma ional ba ie s e lec lack o amilia i y wi h using digi al de ices o lack o
awa eness o new paymen p oduc s. Digi al capabili y and inancial li e acy can be buil h ough
educa ion o expe ience. T adi ional passi e educa ional app oaches, howe e , ha e p o en
insu icien o meaning ul inancial li e acy building. Ins ead, inancial educa ion s a egies mus
e ol e owa ds mo e in e ac i e, engaging, and embedded expe iences (A anasio e al., 2019).
P o ide s could seamlessly in eg a e inancial educa ion in o hei p oduc s and se ices, allowing
consume s o lea n and p ac ice inancial skills o ganically as hey manage hei inances. This
app oach no only enhances inancial li e acy bu also builds consume con idence in managing
digi al inancial ools. Gami ied me hods and in ui i e educa ional in e en ions, embedded sub ly
in o daily inancial in e ac ions, may u he solidi y inancial li e acy skills (A aya e al., 2019).
Repea ed use o digi al paymen s builds expe ience o e ime, which in u n can lead o
be e -in o med use s: indi iduals wi h mo e expe ience ely less on agen s and a e cha ged lowe
ansac ion ees (B eza e al., 2020). Whe he accumula ed consume expe ience spills o e in o
new ansac ion modes is an impo an a enue o u u e esea ch, pa icula ly how consume
expe ience wi h P2P ans e s a ec s hei willingness o engage in pe son- o-business (P2B) and
pe son- o-go e nmen (P2G) digi al paymen s.
Digi al paymen s can be subjec o aud and e o s, wi h nega i e consequences o use
us . One app oach o inc easing paymen s secu i y is by p omo ing compe i ion among p o ide s.
Empi ical e idence is lacking, howe e , on he impac o ma ke compe i ion on aud mi iga ion
in digi al paymen s se ices. In designing a paymen s ecosys em, i would be use ul o know i
consume s and i ms pu mo e us in public p o ide s, e.g., a cen al-bank as -paymen s sys em,
o in p i a e p o ide s. O he app oaches include s onge egula o y o e sigh , use complain
sys ems, and public p o ision o anspa en and eal- ime in o ma ion abou aud incidence. Low
us in inancial ins i u ions by disad an aged g oups may be o e come in some cases h ough
educa ion. In Pe u, a andomized e alua ion o a 3-hou aining session designed o build us in
inancial ins i u ions o bene icia ies o a condi ional cash ans e p og am ound a 33 pe cen
inc ease in us and a leng hening o deposi pe iods in a public bank (Galiani e al., 2022). Simila
in e en ions can be es ed o e ec i eness in building us in p i a e in ech p o ide s.
29
These policy solu ions, implemen ed collabo a i ely by policymake s, egula o s, and
inancial se ices p o ide s, can con ibu e o alle ia ing emaining ba ie s and pa e he way o
deepe , sus ained paymen s inclusion h oughou La in Ame ica, ul ima ely os e ing g ea e
economic esilience, oppo uni y, and g ow h.
30
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