Digital Commerce: Sustained Growth with Increasing Market Concentration

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Latin America’s digital commerce market continues to expand rapidly. The market is projected to grow from nearly USD 630 billion in 2024 to over USD 900 billion by 2026, according to PCMI, reflecting strong acceleration in online activity within a short time horizon. At the same time, retail E-Commerce is steadily deepening its role within the broader retail landscape, reinforcing digital channels as a core component of consumer purchasing behavior across the region.

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Transaction activity mirrors this structural expansion. E-Commerce transaction volume is forecast to surpass over USD 1,000 billion by 2027, even as growth gradually moderates, reflecting a maturing adoption curve. Market performance remains highly concentrated, with Argentina, Brazil, and Mexico accounting for the majority of Latin America’s retail E-Commerce sales in 2025, anchoring regional performance and shaping competitive dynamics.

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Underlying this growth, digital access continues to strengthen. By 2026, internet penetration across Latin America is approaching saturation, reinforcing the foundation for sustained participation in digital commerce ecosystems and supporting continued expansion across both urban and emerging consumer markets.

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Payments: Structural Shift Toward Instant and Non-Cash Transactions

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Latin America’s payments market is undergoing a fundamental reconfiguration. Payments revenue is projected to triple by 2027, reaching approximately USD 0.3 trillion, driven by sustained growth in digital transactions and expanding financial inclusion, according to McKinsey & Company. Despite this expansion, the region will account for only a modest share of global payments revenue, underscoring both its growth potential and its relative position in the global payments ecosystem.

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Transaction behavior is shifting decisively away from cash. Non-cash transactions are set to reach over 340 billion by 2028, reflecting rapid adoption of digital and account-based payment methods. Cards remain the largest category, but instant payments and credit transfers are increasingly reshaping transaction behavior as consumers and merchants prioritize speed, efficiency, and convenience.

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Brazil’s Pix system exemplifies this transformation. Pix transaction volume reached USD 3.2 trillion in 2023, as per Capgemini Research Institute, and its adoption continues to accelerate as it displaces traditional payment methods. By 2025, Pix is expected to overtake credit cards in Brazil’s online payment market, reinforcing the region’s shift toward real-time, low-cost payment infrastructure and the growing importance of account-to-account transactions in digital commerce.

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Consumer Behavior and Alternative Payment Expansion

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Consumer adoption reflects accelerating digitalization across the region. By 2023, debit card usage had surpassed cash for in-person transactions, driven by financial inclusion, expanding digital banking access, and broader acceptance of electronic payments. In 2024, 60% of consumers used smartphone payments at least once per month, according to Euromonitor, highlighting the growing centrality of mobile devices in everyday payment behavior.

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At the same time, alternative payment instruments are gaining traction. Cryptocurrency ownership in South America more than doubled from over 25 million in 2023 to over 55 million in 2024, reflecting consumer responses to inflation, currency volatility, and financial access constraints, as per Triple A. This trend underscores the increasingly diverse payment landscape that is emerging alongside traditional banking and digital wallet ecosystems.

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AI Adoption: Expanding Rapidly but Scaling Unevenly

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AI adoption across Latin America’s payments and E-Commerce sectors is accelerating, particularly in fraud prevention, customer engagement, credit assessment, personalization, logistics, and marketing. By 2025, nearly 35% of organizations had AI implemented in some areas, while over 15% had AI positioned as central to corporate strategy, according to Hi Ventures, reflecting early-to-intermediate maturity across the region and growing recognition of AI’s strategic value.

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However, scaling constraints remain significant. Many Latin American technology firms continue to face major execution gaps in deploying AI at an organization-wide level, particularly when compared with global peers. At the same time, workforce impacts are mixed, with productivity gains emerging alongside measured automation risk, reinforcing AI’s dual role as both an efficiency catalyst and a structural disruptor.

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Talent shortages, infrastructure weaknesses, limited computing capacity, and underdeveloped data ecosystems continue to constrain AI expansion. In 2024, over 70% of companies identified talent shortages as the top AI challenge, followed by data privacy and technology readiness concerns, underscoring the structural barriers limiting broader deployment and long-term competitiveness, as per LTF.

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AI Economics and Competitive Positioning: Monetization, Growth, and Investment Signals

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AI is increasingly shaping firm-level competitiveness across Latin America’s digital economy, with adoption moving beyond experimentation into measurable commercial impact. By 2025, nearly 90% of startups in the region had integrated AI into business models and processes, signaling widespread normalization of AI-driven operations, according to SaaSholic.

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This shift is reshaping growth dynamics across sectors. In 2025, AI-enabled companies consistently outperformed non-AI peers in revenue growth across multiple income bands, reinforcing AI’s importance as a structural driver of scalability and market differentiation. These performance gaps indicate that AI adoption is no longer simply an efficiency tool, but a core determinant of long-term competitive positioning.

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Investment behavior mirrors this transformation. Venture capital activity across Latin America is increasingly oriented toward AI-driven business models, reflecting a clear shift in capital allocation priorities within the region’s innovation ecosystem. At the same time, persistent gaps in in-house AI expertise remain a primary constraint on broader portfolio-level deployment, shaping both the pace and depth of AI diffusion across companies and markets.

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Conclusion

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By 2026, Latin America’s E-Commerce, payments, and AI ecosystems are advancing through a complex interplay of rapid growth and persistent structural constraints. Digital commerce expansion, instant payments adoption, fintech acceleration, and AI integration are reshaping how commerce and finance operate across the region. At the same time, infrastructure gaps, talent shortages, cyber risk, regulatory fragmentation, and uneven readiness continue to shape the pace and sustainability of this transformation. The region’s ability to align innovation, governance, workforce development, and investment will ultimately determine how effectively Latin America converts its accelerating digital momentum into long-term competitiveness in global digital markets.

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