The Covid-19 pandemic speeded up financial inclusion in Latin America, with the number of bank accounts increasing by 24% in 2020.
Thanks to the growing breed of fintech startups and neobanks, opening an account with a formal bank was not a challenge, says research firm America’s Market Intelligence in a report.
“With most businesses shutdown and mobility greatly reduced, people found themselves in severe need of digital financial services,” the report noted.
A record number of Brazilians opened a bank account during the year. Colombia also experienced a dramatic growth in the banked population. However, the adoption of digital banking was relative slow in Mexico and Chile.
In many countries, the report noted, the unbanked have “almost disappeared”. That’s largely because there is a growing competition among fintechs to sign up more people to their services.
“Except for rural areas and people over the age of 65, banking services are readily available at no cost and with very few barriers to entry,” wrote Lindsay Lehr, an Associate Managing Director at AMI.
The biggest beneficiary of this digital payment boom was the e-commerce industry, which saw a staggering 21% increase in business volume during the year.
In the meantime, contactless payment methods are also gaining traction in many countries, including Brazil and Chile.