Mastercard Research Shows Surge in Digital Payments as Ecommerce Reaches New Heights Around the World
MIAMI, FL | June, 30, 2020
Study shows consumers worldwide opting for touch-free, secure and seamless ways to pay.
Consumers in Latin America plan to continue shopping online for the foreseeable future.
The way we shop is changing. As constraints are being imposed on our daily lives due to COVID-19, consumers are adopting new payment habits at an accelerated pace, according to a global study by Mastercard conducted in 15 markets, including several markets in Latin America. Consumers are increasingly moving away from cash and opting for contact-free and digital payments experiences – and they don’t expect to go back. Ecommerce is also seeing a surge in growth rates, according to Mastercard data, as consumers increasingly shop online.
“Latin America has long been at the forefront of the digital transformation. Consumers in the region are highly connected and are fast adopters of new technologies,” said Walter Pimenta, Senior Vice President, Products & Innovation, Mastercard Latin America and Caribbean. “At Mastercard, our approach to product design has always been consumer-centric and digital-first. We are happy to be able to meet consumers where they are today, fully ready to move away from cash and embrace secure, digital payments for the long run.”
As payment behaviors evolve, two notable trends emerge in our research:
- In store, a massive and sudden move away from cash: Globally, almost seven in 10 consumers say the shift from cash to digital payments will likely be permanent and nearly half of consumers plan to use cash less, even after the pandemic subsides, according to a Mastercard weekly survey launched April 27.
In Latin America since the pandemic began, two-thirds of respondents surveyed say they are using cash less or not at all. 53% of Brazilians, and 41% of Mexicans and Colombians say they plan to use less cash. When asked about the changes they believe are here to stay, 85% of Colombians, 69% of Mexicans and 63% of Brazilians mentioned contactless payments.
- A steep increase in e-commerce: Ecommerce has been a growing part of Mastercard's business for many years, but for the first time ever, online payments surpassed in-store payments in the first quarter of 2020 with 41% of consumers globally reporting they are going to purchase more online in the following two weeks compared to the previous two weeks.
In Latin America, 54% of Colombians, 52% of Brazilians and 46% of Mexicans intend to purchase more online. This behavioral trend is also supported by Mastercard’s own transaction data.
Building the Foundation for the Future of Payments
From a simplified online checkout experience to an in-store tap on a contactless terminal, Mastercard is leveraging its insights and technology, forging critical partnerships and driving innovation to ensure a solid foundation to deliver the future of payments.
- Using non-sensitive data to enhance security: Mastercard Digital Enablement Service (MDES) turns card numbers into tokens (i.e. tokenization) that become useless to fraudsters and eliminates the frustration of manually updating your card information. Mastercard continues adding partners from across the ecosystem, including Mercado Libre/Mercado Pago, PayPal and Didi to deliver this security at scale.
“The pandemic has led many consumers to make their first-ever online purchase, starting a new payment habit which they are telling us is here to stay. Roughly 70% of the cards in the region are already MDES enabled, and we are seeing a significant increase in the number of transactions being tokenized. This growth in tokenization sends a ripple effect across the industry, resulting in peace of mind for consumers, and a reduction in fraud for merchants and issuers,” added Pimenta.
- Digital-First to power consumer choice: Even before the pandemic, mobile devices have been our primary source of communication, information and increasingly, commerce. That’s why, instead of merely supporting physical cards with digital experiences, we have been focused on designing digital products from the ground up, with the physical card optional. We have recently partnered with Chilean multinational retailer, Falabella, to further innovate the digital experience, delivering a Digital First credit card to be used with FPay, Falabella’s recently released digital wallet, or Banco Falabella’s app.
- Fintechs push the boundaries: The rise of open banking and consumer demand for digital payments has driven an unprecedented growth in fintechs across Latin America. Mastercard’s digital product design and fintech-centric Accelerate program makes us the partner of choice for the leading fintechs in the region such as Nubank, Klar, Creditas and Ualá. Our ability to deliver a consistent, seamless user experience sets us apart as a best-in-class provider of digital solutions and enabler for the newest breed of fintechs. During the first quarter of 2020, Mastercard increased its business partnerships with fintechs by 40% across various markets in the region. Most recently, Mastercard partnered with fintech enablers Tutuka and Galileo to further expand our digital capabilities in the region and accelerate the implementation of digital-first programs across LAC.
Mastercard proprietary study conducted between April 27-May 17, 2020 among adults 18+. 6,750 interviews were conducted across 15 countries: Australia, Brazil, China, Colombia, France, Germany, India, Italy, Spain, Japan, Mexico, Russia, United Arab Emirates, United Kingdom, and The United States of America.