The VISA Product Director has revealed a massive increase in the growth of digital payments in Latin America since the pandemic-related blockade in the region occurred. More citizens of Latin American countries are turning to digital payments. At the same time, they also seek more and more Bitcoin as a viable digital payment option.
The economies of some regions of the world are not yet as developed as the United States, Europe and Asia. Latin America, for example, is still home to many unbanked citizens. However, the quarantine conditions in place to combat the spread of the outbreak have forced cash-focused citizens to switch to digital payments.
According to the product manager of VISA, Jack Forestell, more than 13 million VISA cardholders in Latin America made their first purchase of digital e-commerce during its fiscal quarter in March.
At the start of the pandemic, WHO and CDC recommended that people around the world stick with contactless payment options for cash carrying germs. But it is the lack of access to retail transaction locations at points of sale that has forced the trend.
"We are seeing a massive acceleration towards the adoption of electronic commerce," Forestell told MarketWatch.
Bitcoin's growth has been remarkable in many Latin American countries
That same e-commerce adoption and the increase in digital payment options are also leading to the adoption of Bitcoin and an increase in interest in cryptocurrencies in Latin America.
How I know previously reported, unbanked citizens in areas like El Salvador and Argentina have increased the use of Bitcoin as an alternative solution to store wealth, make cross-border payments, and pay for daily necessities, such as groceries. For areas with especially poor infrastructure, Bitcoin is an ideal option.
Many of the same reasons that VISA executives point to as reasons for the boom in card use in Latin America are also reasons to use Bitcoin.
Bitcoin is a contactless digital payment method that can be sent without the need for a third party. In areas without infrastructure or where native fiat currencies are dying in haste, Bitcoin is especially valuable.
However, much of the growth in the tables above was a precondition to the pandemic, so in the short term these numbers have only increased further.
However, Bitcoin remains highly volatile as a speculative asset and its price fluctuations continue to pose a challenge to liquidity struggling countries that are already suffering from bankrupt fiat currencies and are likely to remain so for the foreseeable future. It could make many stick to traditional digital payment methods like VISA cards until prices stabilize or start to rise again steadily.