Payment providers in Latin America showcase a remarkable growth, with numbers surging by an impressive 150% over the past five years.
In the ever-evolving world of cross-border payments, Latin America is making a significant mark. More payment companies are setting up shop in the region, partnering with larger international firms, and forging ahead with digital payment solutions.
This shift is driven by Latin America's openness to new technology and its affinity for digital payment solutions. The region's job market recovery, particularly among immigrants based in the US, has also boosted remittances, a critical component of cross-border payments.
Our platform recently published the 2023 Cross-Border Payments 100, a market map of the top players in the industry. This year, five companies from Latin America made the list, marking a 150% increase since 2019. The Latin American companies on the list include Mercado Pago, EBANX, dLocal, Monex, and Banorte, all headquartered or founded in Argentina, Brazil, or Mexico.
One of the key developments in the region since 2019 is the increasing focus on SME cross-border payments. Small and medium-sized enterprises (SMEs), which constitute 98% of businesses and 60% of employment in Latin America, face challenges such as high fees, delays, and lack of transparency. Mastercard introduced "Mastercard Move" to address these barriers, aiming to modernize the financial infrastructure supporting SMEs in their international operations.
While total cross-border payment transaction volumes saw a decline between 2022 and 2023, particularly on the commercial/B2B side, consumer cross-border payments are expected to grow faster. Remittances, a substantial flow to Latin America, continue to be a critical component, with Mexico leading the way in 2023, followed by Guatemala.
The broader payments ecosystem around Latin America is evolving, with the rise in adoption of instant payment systems like Brazil’s Pix and Mexico’s CoDi. Payment processors serving the fragmented Latin American markets are increasingly required to deliver multi-channel and multi-currency capabilities.
However, fees for cross-border B2B payments remain significant, especially for SMEs, and remittance costs globally average 6.2%, above the UN target of 3%. This highlights ongoing friction and the need for continued innovation to lower costs.
Looking ahead, Latin America's cross-border ecommerce market size is expected to surpass $100 billion by 2026, driven by demand for international brands and marketplaces. This trend supports the growth of consumer-driven cross-border payments and the associated infrastructure upgrades.
Uruguay is a notable location in the region where payment companies are expanding, contributing to a more dispersed geographical spread of companies in the top 100 than ever before. The cross-border payments industry has seen increased activity in Latin America, making it a real hot spot for service providers.
Daniel Webber, CEO and founder of the platform, expects Latin America to continue growing in importance in the cross-border payments industry. The 2023 Cross-Border Payments 100, now in its fifth year, is widely recognized as the definitive benchmark of the industry.
The significant growth and recognition of Latin American companies in finance, such as Mercado Pago, EBANX, dLocal, Monex, and Banorte, are marked by their inclusion in the 2023 Cross-Border Payments 100, with a 150% increase since 2019.
The increasing focus on small and medium-sized enterprises (SMEs) cross-border payments in Latin America, hindered by high fees, delays, and lack of transparency, has prompted Mastercard to introduce "Mastercard Move" to modernize the financial infrastructure supporting these businesses.
