Mastercard New Payments Index: Consumer Appetite for Digital Payments Takes Off

• 83% of Latin American consumers are considering emerging payments such as biometrics, digital currencies, contactless and QR codes, according to the Mastercard New Payments Index
• Now, nearly 90% of in-person transactions globally take place at a contactless-enabled merchant ³

MIAMI - FL – May 4, 2021 – As the world went into pandemic lockdown in 2020, consumers shifted their spending habits to embrace contactless tap-and-go payments and online shopping. As stores closed and social distancing took hold, retailers worldwide moved their businesses online, embraced e-commerce and explored the potential of new ways to pay. More than a year later, research from Mastercard shows that the adoption of new payment technologies is rising, and consumer appetite for new, fast, and flexible digital experiences continues to grow.

The new Mastercard New Payments Index, conducted across 18 markets around the world, shows 93% of people will consider using at least one emerging payment method. Specifically, within the Latin American region, 83% of people said they would consider using at least one emerging payment method, such as cryptocurrency, biometrics, contactless, or QR codes. Nearly three-fourths of Latin American respondents (72%) agree they have tried a new payment method they would not have tried under normal circumstances, compared to 63% globally, but the pandemic has galvanized people to try flexible new payment options to get what they want, when they want it. With this interest and consumer demand also comes a greater expectation for businesses to provide multiple ways to shop and pay. In fact, more than half of consumers in Latin America (59%) say they would avoid businesses that do not accept electronic payments of any kind.

 “The pandemic accelerated a trend that we had already seen around the world, and in Latin America & the Caribbean this hasn’t been different. Consumers are looking for flexibility and new ways to pay – and retailers and issuers that can adapt to this scenario and offer various choices are the ones that are leading the way. At Mastercard we are working with our customers to help them meet consumers expectations, by offering not only support to small merchants, but also with issuers to bring digital first solutions”, says Walter Pimenta, Product and Innovation Senior Vice President, Mastercard Latin America and the Caribbean.

Contactless technology was the digital catalyst to explore new payment options because of its fast, secure, and touch-free experience. Between the first quarter of 2020 and the same period in 2021, more than 100 markets saw contactless as a share of total in-person transactions grow by at least 50 percent. ³ A year into the COVID-19 pandemic, contactless is showing its staying power and dynamism – in the first quarter of 2021 alone, Mastercard saw 1 billion more contactless transactions as compared to the same period of 2020, with particular momentum in emerging contactless markets like the U.S. and Brazil, where contactless penetration in the two markets combined grew by nearly 3x year-over-year. ³ All signs point to a continued growth path for contactless, with nearly 7 in 10 consumers (67%) anticipating using a contactless card this year.

Looking to the future, digital currencies, biometrics, contactless and QR codes are trending as emerging payments technologies as people’s comfort with them and understanding of them increases and the use of cash decreases. In fact, 71% of people in LAC say they expect to use cash less moving forward. The exploding interest in new payment technologies may encourage businesses to expand their options at checkout. The Mastercard New Payments Index found:

• Cryptocurrency¹ Gains Ground, With Millennials Primed to Jump In – Today consumers can buy, sell, and trade cryptocurrency as a commodity or investment. Consumers also are increasingly showing interest in being able to spend crypto assets for everyday purchases. As interest in cryptocurrencies as a payment method continues to accelerate, nearly 4 in 10 people (37%) Latin America and the Caribbean say they plan to use cryptocurrency in the next year. In fact, 79% of Millennials would be interested in learning more about cryptocurrencies, and 76% say they would use them more if they understood them better.
• Biometric Payments Are More Trustworthy – Perceptions of safety and convenience have been front and center for people over the past year, while the comfort and enthusiasm around biometric methods have been growing. Those who are most comfortable leveraging biometrics include the affluent, men, Mastercard’s card holders and those located in Brazil (53%) and Perú (40%). In fact, 68% feel safer using biometrics to verify a purchase than entering a pin.
• Touch-free Options are Cleaner and More Convenient – The use of QR codes in certain markets complements the extensive investment in contactless payments to provide merchants of all sizes – from international chains to individual shop owners and street vendors – a fast, secure and inexpensive way to accept payments. Consumer desire for clean and convenient ways to pay will remain post-pandemic, with 66% of respondents in LAC expecting to use more payment technologies such as QR codes in the next year.

To Meet People’s Demands, Businesses Forced to Jump into Emerging Payment Trends

With consumer interest around new payment technologies, the expectation for businesses to adapt for the long-term is here to stay. Nearly eight in 10 respondents (77%) in LAC agree that they prefer to shop at stores that have both an in-person and online presence, and 70% noted being more excited to shop at retailers that can offer the latest payment methods. A recent study on 5,500 major Mastercard merchants, showed that between Q1 2020 and Q1 2021, more than a fifth of these merchants globally increased the number of ways they connect with consumers either by enabling an e-commerce channel or accepting contactless transactions². Over the same period, Mastercard saw the total number of card-not present transactions grow by over 30%.⁴

As one way to address this consumer preference for fast, touch-free payment experiences, many merchants are turning to contactless payments. Now, nearly 90% of in-person transactions globally take place at a contactless-enabled merchant, and nearly all merchant categories saw an increase in contactless transactions as a share of total in-person transactions year-over-year in the first quarter of 2021. ³

This behavior shift is reinforced by the desire for consumer choice – with 86% of Latin Americans saying that they expect to make purchases when they want and how they want. The businesses that can provide multiple ways to shop and pay are best positioned to meet these expectations. As the demand for emerging payments and choice continues, it requires a wider range of payment solutions, insights, and products to meet the accelerating enthusiasm for the future state of pay.