Magdalena Tanev

In a historically cash-based economy where a big chunk of the population remains unbanked (over 40% in Colombia, Mexico and Peru), digital payments are gaining momentum in Latin America. During recent years and even more so during the pandemic, QR code payments have surged in popularity. 

QR stands for “quick response” — and codes can be encrypted with payment information to facilitate contactless digital purchasing. QR codes allow customers to make payments simply by scanning the code with their smartphone camera, which then withdraws the money from their digital wallet.

In LATAM, 66% of people expect to use payment technologies such as QR codes in the next year. And while QR codes were more popular in Europe than LATAM in 2020, the region is estimated to significantly overtake Europe by 2025. In fact, Americas Market Intelligence even predicts that instant payments will soon displace cash in the region. 

Let’s explore how QR code payments came to prominence in LATAM, the factors behind their success, and what’s ahead for digital payments. 

The QR code surge in LATAM

Companies facilitating QR code payments in LATAM are emerging all across the region. For example, in Argentina, where a local standard for QR codes was created in 2018, usage has skyrocketed. Companies including Mercado Pago, TodoPago, ValePEI, Ualá, PIM, and Rapipago allow users to pay via QR codes from their virtual wallets or accounts.

The Peruvian Central Bank recently hopped on the bandwagon, allowing nine digital payment provider companies to offer QR code payments. This represents a huge step towards transforming the payment methods of a society that traditionally depends on cash.

In similarly cash-based Colombia, fintech Transfiya is setting its sights on becoming the country’s number one option for payments and transfers. The company’s next steps for 2021 include allowing Colombians to make transfers via QR codes to pay utility bills, small merchants, or other individuals. From large banks to small merchants, a range of players are getting into the QR code race to provide payment ease and security to new consumer segments.

These examples represent just a snapshot of QR code growth across the region — what’s behind it?

The foundations for QR code success

QR codes were on the rise prior to COVID-19, but the pandemic undoubtedly accelerated their trajectory. With many people across the region turning to e-commerce and seeking contactless payments in stores and establishments, QR codes provided the perfect way to make convenient payments and stay socially distanced. 

Due to the pandemic, many people who previously didn’t have access to traditional banking services joined the fintech revolution and opened up digital wallets and bank accounts. This allowed them to pay via QR code instead of cash, even without a traditional bank account.

Not only are QR codes convenient, but they also provide a level of security as people can pay for goods and services without sharing their personal information with each new merchant. Now, as restrictions lift across the region, restaurants, brick-and-mortar stores, and entertainment experiences offer a more convenient way to pay and unlock new ways to engage with their customers. 

The Future of Digital Payments Methods In LATAM

While QR codes have become commonplace in LATAM, they aren’t without security concerns. In a 2021 study by Ivanti, only 39% of users said they could identify a malicious QR code and only 37% of respondents were aware that a QR code can download an application. 

When it comes to physical QR codes used in in-person establishments, these businesses must be careful to avoid tampering that could result in fraudsters siphoning off payments meant for the merchant. Given the convenience of digital payments alongside growing security demands, it’s unsurprising that alternatives to QR codes have emerged. This Mastercard report found that 83% of people in LATAM consider using at least one new payment method, whether that’s the QR code, biometric technologies, or cryptocurrencies. 


Still very much in their infancy, payments via cryptocurrency in LATAM are starting to gain steam. Erick Padilla, COO of Mexican fintech Dapp Payments told iupana, “We are realizing that people are seeing cryptocurrencies as real money. We are already over that line of collective uncertainty about their use.”

Padilla expects it to be a matter of a year or two before crypto-enabled payments become more common. 

In order for crypto to gain further momentum as a payment method for the average Latin American consumer, the industry needs consumer protection via regulatory endorsement and increased stability — something which stablecoin (digital currency tied to fiat money or other assets) could provide.

Leading the way on the crypto front is El Salvador, which recently became the first country in the world to recognize Bitcoin as legal tender. In Mexico, cryptocurrency exchange Bitso recently raised $250 million in Series C capital, also laying the foundations for more crypto penetration in LATAM.

Biometric technologies

Payments via biometric methods are also expected to become more popular in LATAM. Colombian banking app Nequi was the first of its kind in the country to offer facial recognition as a way for customers to complete authentication. However, the smartphones and operation systems necessary for biometric authentication are limited in Colombia, which has been an obstacle to widespread adoption.

Mastercard also recently introduced payment via selfie and fingerprint available in LATAM, allowing cardholders to securely and conveniently authenticate online payments. But until more people have the right technology to facilitate biometric payments, rollout in the region will be fragmented.

Contactless digital payments are here to stay in LATAM and will continue to evolve as demands for consumer convenience and data security soar. While QR codes have a firm hold for many merchants, proponents of the technology must consider the growing influence of cryptocurrency and biometric-powered payment methods.