In recent years, the adoption of prepaid cards has surged significantly in Latin America. The growing adoption of the prepaid card is primarily attributed to the innovative FinTech firms that are offering digital payment solutions to the unbanked population in the region, which is one of the largest globally. For instance, only three out of 10 internet users in Mexico have access to digital financial services.

Along with the higher percentage of the unbanked population, the growing e-commerce industry and the global pandemic-induced restrictions have also resulted in the rising usage of prepaid cards in Latin America. With this growing adoption of prepaid cards, FinTech firms in the region are expanding their presence across the region to expand their market share. For instance, Argentina-based FinTech firm, Uala provides consumers with prepaid cards managed to issue 100,000 debit cards within five months of its launch in Mexico in 2021.

The Central Bank of Brazil is allowing cross-border purchases using prepaid payment accounts:

In September 2020, the Central Bank of Brazil introduced the use of prepaid payment instruments in Brazilian reais to complete the purchase of foreign goods and services through e-wallets. According to the Bank, the introduction of new regulation will enable conversion to the foreign exchange amounts in reais immediately, therefore, allowing consumers to quickly know the cost of their intended purchase.

Online gaming and entertainment segments driving the growth of the prepaid card industry in Latin America:

Social distancing norms and home isolation needs made consumers spend more time on indoor entertainments activities such as gaming and streaming and changed their ways of giving and using prepaid cards. With people spending more time playing games, the global pandemic resulted in the growing usage of gaming prepaid and gift cards in Latin America over the last four to eight quarters.