Financial Institutions in Latin America are taking advantage of new consumer behaviours to develop and implement forward-thinking payment methods… a progress that was almost unthinkable just a few years ago. J.P. Morgan’s Alejandro Pereyra calls it a ‘quantum leap’ for LATAM players.
Here’s how it happened.
The impact of the pandemic was felt differently, depending on where you were in the world. In Latin America, which endured one of the most stringent lockdowns, movement was severely restricted and banks were closed. The need to access money resulted in a surge in tech adoption and digitalization with rapid adoption for both consumer and corporate use.
Coupled with challenges specific to the region – regulation, geopolitical uncertainty, multicultural complexities – the impact of this event was unprecedented… and the change is still being felt. Enabled by broadband and smartphone penetration, fintechs have brought a new momentum to the ecosystem. And crucially, as consumers tap into faster and frictionless payments in their everyday lives, the same experience is demanded of financial institutions.
The rise of marketplaces and ecommerce is especially notable in Latin America, as connected ecosystems become more prevalent. The huge benefit for business is the ability for well-established ecommerce to link to these ecosystems with access to a variety of different clearing systems. The driver for this: real time payments. Across the region, but especially in Mexico and Brazil, the push for real time payments (RTP) is on. It brings the same settlement times, the same speeds, the same 24/7 availability as in the consumer world.
J.P. Morgan’s Latin American Regional Managing Director, Alejandro Pereyra, expects RTP-based solutions to grow exponentially over the next three years. “We have seen the shift in payments first hand. Our clients want security, scalability and resilience, and to have access to the best in class solutions that a global bank like ours can bring. We have a huge emphasis on technology investment in region, and supported by our heritage of more than 100 years in LATAM, we are well positioned to support the large corporates, multinationals and fintechs. It’s a very exciting market right now”.
Visibility and transparency are equally crucial for cross border payments. Alejandro adds, “With Swift gpi, you can track a cross border payment in 90% of cases, and settle in 30 minutes. Because of this technology, what we can offer our clients is changing. The transparency of cost is also really important, especially in foreign exchange. The FedEx model is a great example of that”.
J.P. Morgan has almost 20% market share of LATAM’s Swift market for Financial Institutions; one in five US dollars goes to J.P. Morgan, and they are the number two provider of euro clearing in Germany. In fact, the bank has 12% of all euro payments that come out of LATAM; in Brazil it’s close to 30%.
This coverage is one of the key benefits to using one bank with a strong presence across the region, Alejandro believes. “To deal with just one provider in many of these countries makes banking a lot easier for business. Our clients appreciate the commonality of reporting, of solutions, of technology – whether they are in Belgium or Brazil.”
J.P. Morgan attended FELABAN Guatemala 2022. Find out what the hot topics were for attendees.
Receive key updates and news with relevant actionable insights and best practices — including the latest intelligence on payments trends, digital innovation, regulatory change, ESG and sustainable ﬁnancing and much more.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of J.P. Morgan, its affiliates, or its employees. The information set forth herein has been obtained or derived from sources believed to be reliable. Neither the author nor J.P. Morgan makes any representations or warranties as to the information’s accuracy or completeness. The information contained herein has been provided solely for informational purposes and does not constitute an offer, solicitation, advice or recommendation, to make any investment decisions or purchase any financial instruments, and may not be construed as such.
JPMorgan Chase Bank, N.A. Member FDIC.
JPMorgan Chase Bank, N.A., organized under the laws of U.S.A & Mexico. with limited liability.
Enhancing capital efficiency and fuelling long-term growth with working capital optimization
Dec 01, 2023
Through insights derived from the analysis of working capital metrics, this report aims to help treasury and finance professionals for Japanese companies track working capital trends and guide their initiatives to optimize working capital management for recovery and growth.
Supporting future strategies: Working capital index Latin America 2023
Nov 30, 2023
Through insights derived from the analysis of working capital metrics, this report aims to help treasury and finance professionals for Latin American companies track working capital trends and guide their initiatives to optimize working capital management for recovery and growth.
Data helps ease the pain of cross-border payments for Financial Institutions (FIs)
Nov 30, 2023
There are several challenges involved in cross-border payments, but the data that is associated with each transaction can help alleviate those obstacles for financial institutions.
Payments do more than you think for insurers
Nov 28, 2023
Delivering efficient, dependable solutions at scale with the security you’d expect from a trusted payments innovator.
How AI will make payments more efficient and reduce fraud
Nov 20, 2023
Artificial intelligence (AI) is expanding the payment capabilities of non-bank financial institutions, according to a panel at this year’s J.P. Morgan NBFI Leaders Forum in Sydney.
Enhance your social commerce strategy with payments innovation
Nov 07, 2023
Social commerce has become an integral strategy supporting all business globally across industries.
Driving advanced cross-currency payments for financial institutions
Nov 06, 2023
See how this one innovative global solution can help you rethink the way you do cross-border business.
Helping pay for the cost of college
Oct 31, 2023
How friends and family can contribute funds towards a child’s future education expenses, using debit cards to gift to a 529 account
You're now leaving J.P. Morgan
J.P. Morgan’s website and/or mobile terms, privacy and security policies don’t apply to the site or app you're about to visit. Please review its terms, privacy and security policies to see how they apply to you. J.P. Morgan isn’t responsible for (and doesn’t provide) any products, services or content at this third-party site or app, except for products and services that explicitly carry the J.P. Morgan name.