One sector which has shown not only resilience but real growth during the past year is fintech in Latin America. The crisis has sparked significant change in a region that was already demonstrating its agility, adaptability and appetite when it comes to financial services. Despite ongoing social and political pressures, the market has boomed over the past decade. Since 2014, fintech funding in Latin America has grown from less than $50 million to top $2.1 billion in just six years. In total, fintech in Latin America is estimated to have a valuation of more than $150 billion. This eye-watering amount has truly captured the world’s attention and continues to dilute the spotlight from other markets, such as Asia. Strong government drives to increase foreign direct investment have proven effective, with businesses capitalizing on tax and investment incentives in the region. Such incentives have not just targeted businesses, but also individual consumers. In Colombia, the government instigated VAT-free days as an initiative to kickstart spending and halt economic contractions. As a result, we at PayU recorded sales rise by at least seven times that of regular shopping days. This is a great example of how the government has collaborated with both fintech and e-commerce platforms to make sure they’re ingrained across Latin America.
Although fintech in Latin America has remained resilient, the pandemic is not over, and nobody has a crystal ball. As borders begin to re-open, global e-commerce remains the best way for merchants to safeguard themselves for the long-term effects of Covid-19. Merchants wanting to capitalize on the surging demand for e-commerce must seek expertise from an informed partner; Latin America is an exciting albeit complex and diverse region. Payment technologies that make the shopping experience adaptable to different consumer needs, frictionless and safe are integral to success. Ultimately, thanks to the welcoming regulatory landscape and skyrocketing internet penetration, there’s never been a better opportunity for both international and domestic merchants to maximize on Latin America’s e-commerce opportunity. I, for one, cannot wait to see this region continue to flourish, both in e-commerce and into a global fintech hub.