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FinTech Collective and Polymath Ventures published an article this week on the future of payments in Latin America. When analyzing the development of financial technology in emerging markets, it’s arguably more useful to examine precedents in other, previously emerging regions, rather than simply in developed markets. Hence, we looked eastward toward China to help us better understand the current state of the payments landscape in Latin America.
Akin to what led to the massive adoption of digital wallets in China, the ones paving the way to analogous digitalization in Latin America also rely on the structural cultural roots of the region, although different ones. These roots are in the lack of trust in financial institutions, which has been one of the main headwinds for “bankarization”, as individuals have historically suffered from high fees and interest rates. This leaves room for more convenient and lower-cost alternatives to disrupt the landscape.
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