Central America & Dominican Republic Lead Digital Payments Surge in LATAM

Panama, the region of Central American and the Dominican Republic saw the fastest growth in digital payment adoption within Latin America and the Caribbean, according to a recent study by the Inter-American Development Bank (IDB).

Digital payment adoption in Central America, the Dominican Republic and Panama doubled (from 4% to 8%) between 2017 and 2021, according to the study.

“The study highlights the number of account holders using mobile money and digital payments, which represents progress in the financial inclusion of businesses and homes in the region, opening a door to other financial products and services, allowing for increasing independence from traditional banking infrastructure,” the IDB explained in a press release.

Digital payment adoption in Latin America and the Caribbean jumped from 47% to 70% between 2021 and 2024, surpassing the global average increase from 35% to 57% during the same period, according to the study.

During this time frame, real-time payment systems such as PIX in Brazil, CoDi in Mexico and Transferencias 3.0 in Argentina have undergone modernization.

Colombia and Costa Rica are leading the region in mobile payment usage among young people, with penetration rates of nearly 30% and 45%, respectively. Mexico and the Dominican Republic closely follow with rates around 35%.

However, the region still lags behind others in adopting digital financial tools and implementing policies that promote financial inclusion. The primary obstacle remains the lack of robust telecom infrastructure.

The IDB’s report highlights the need for national financial inclusion strategies, financial education initiatives, fostering competition within the financial sector and improving loan recovery mechanisms.

Furthermore, the study reveals that companies in Central America and the Dominican Republic encounter financial constraints more frequently (35%) compared to the Latin American average (30%).

Similarly, household financial inclusion sits at an estimated 42% of the average for high-income OECD countries.