With new consumer behavior embracing more digital banking, the capabilities of borderless and contactless payments are becoming more well known, especially in Latin America.  Consumers in LATAM are seeking out simplicity and instantaneous opportunities more than ever before in this growing digital age. They’re looking to familiar opportunities like QR codes and non-fungible tokens (NFTs) that provide better solutions to everyday payments.  

But how impactful are QR codes to digital payments? How has the continuous e-commerce surge impacted Latin America and other marketplaces? Which regions are impacted the most by the growing digital marketplace with NFTs? What digital options do NFTs and blockchain options provide digital payment consumers? Let’s answers these questions and address the future of what consumers should expect moving forward.

QR codes in today’s digital banking

The implementation of Q-code services as payment methods in global markets brings instant payments to life. This solution allows non-credit card holders and fraud-wary consumers to use QR codes without sharing additional information online and pay for goods and services. Capabilities like this expand the opportunity to complete instant payments at any date or time to pay for goods and services to millions of people.

With consumer preferences continuing to shift toward touch-free interactions, it is critical that businesses can connect physical and digital commerce. By providing consumers opportunities to pay digitally via a QR code and popular digital wallets, businesses are more convenient and offer more choices for all modes of commerce, especially as in-person shopping, dining and entertainment experiences resume.

A large part of the acceleration comes from merchants – who had previously dictated payments terms – turning to new, digital alternatives for their clients. For examples, merchants that introduce QR codes for seamless checkout experiences are attempting to improve the customer experience, increase average order value (AOV), while also creating some money-saving automation for the merchant.

Both small merchants and large banks are getting into the QR race for different consumer markets. Recently, Peruvian Central Bank allowed nine digital payment provider companies to operate with QR Code payments in the country. These agreements, transactions and breakthrough decisions in digital banking have transformed the traditional methods of payments in uncharacteristic regions like Peru that is still a traditional cash-dependent society.

In Brazil,  the Central Bank announced a new national QR code standard to help make mobile payments more universal as the pandemic began, after the idea of adopting cashless payments had been pushed in years prior. This Brazilian code created a standardization that accepted a number of different types of payment technology, including cards, chips and tags, and devices – like a typical payment terminal. All this was a movement toward a broader innovation program to update Brazil’s existing financial system.  This included the new payment instrument PIX, which completed payment transactions using company registration numbers, social security numbers, email, and mobile phone numbers. PIX is now available through online banking as well as at ATMs throughout Brazil and is a paramount component of Brazilian financial marketplaces.

According to a recent Mastercard survey, 66% of respondents in Latin America and the Caribbean and 63% in the Middle East and Africa expect to use payment technologies such as QR codes in the next year. The adoption of new payment technologies such as QR codes, cryptocurrencies and biometrics is on the rise.

Looking toward a post-pandemic society, digital currencies, biometrics, contactless and QR codes are becoming more mainstream as consumer’s comfortability with them and understanding of them increases and the use of cash decreases. Trends like QR codes are introducing a gradual shift toward a digital economy and a shift that may eventually lead us toward a global cashless society.

With the pandemic still garnering much of the attention in 2021 and impacting how people shop, contactless shopping is more relevant and popular than ever. Digital merchants offering cashless options makes purchasing more convenient and safer for all. As the pandemic continues to impact small businesses all over the world, QR technology is playing a crucial role when it comes to adapting and moving forward into a new generation.

Pandemic-led changes to NFTs and e-commerce in global marketplaces and Latin America

New forms of digital payments, financial transactions and consumer behavior has grown rapidly across Latin America and the Caribbean in recent years, influenced by a pandemic-led acceleration. That includes digital wallets and cross border payments. For 2021, that adoption is poised for further growth.

Blockchain technology like NFTs and digital ledger technology (DFT) have simplified the digital purchasing options consumer have. NFTs are commonly associated with buying/owning digital artwork, however NFTs present a fundamental change to the way consumers buy and sell digital assets like music, purchasable content for video games, movies and more. NFT options continuously evolve as e-commerce continues to surge within U.S., U.K, Latin American and many other European marketplaces. A staggering $174 million has been spent on NFTs since November 2017. E-commerce has steadily competed for market shares from brick-and-mortar over the past two decades, but growth spiked since the beginning of the pandemic.

According to Statista, Brazil alone was forecast to account for almost one third (32.5 percent) of the e-commerce market in Latin America and the Caribbean in 2020. It was followed by Mexico and Argentina with approximately 28.8 percent and 8.5 percent, respectively. According to projections, various economies in the region are expected to increase their participation in the market in 2021, with Argentina and Mexico experiencing the most notable growth in online sales.

Consumers in Latin America are now using digital wallets that allow them to store NFTs and cryptocurrencies. As the NFT economy moves forward, users in Mexico, Central and South America are spending more time interacting within this new digital space. Although NFTs are still new to Latin America marketplaces, it’s a fintech revolution that will only catch more popularity as 2021 rolls along.

Digital transaction platforms and new payment methods have continued to grow in Latin America since the turn of the century, but during COVID-19, these avenues have been pushed even harder. Countries are pulling ideas from other countries to establish rapport and build new target audiences to help improve their business strategy – which starts with the implementation of digital wallets and alternative payment options like NFTs and DFTs in their markets.

Options for consumers

Both QR codes and NFTs have been around for quite some time, but the pandemic showcased a shift to a remote lifestyle with more global transactions that need technology to keep society progressing. Businesses can now connect with consumers while maintaining COVID-19 friendly protocols with the help of payment merchants and merging technologies. These digital options have accelerated cashless and paperless opportunities, allowing for flexibility, security and growth when Latin America and the world needed them most.

QR codes are becoming more mainstream around the world for consumers during COVID recovery, including Latin America and the adoption of more digital wallets into everyday commerce. QR codes are important when it comes to digital wallets as it is a part of a contactless payment system for consumers to pay for products or services, whereas NFTs are changing the world in other ways. QR codes will continue to grow over time in every regional marketplace, however NFTs need a specific market to establish a sustainable and impactful presence.

NFTs are the gatekeepers of exchanging coveted collectables using blockchain technology, instead of using traditional payment methods.  In Latin America culture, where art, design, music and sports are all heavily expressed and celebrated, the NFT market shows promising growth. The popularity around NFTs derives from the expression of creativity and willingness to interconnect collectables from sellers to buyers with limited barriers, which continues to grow within crypto and blockchain communities in Latin America. 

In our world of digital banking, QR codes and NFTs commonly allows customers a great technological advantage that allows simplistic and instant payments. Now more than ever, NFTs with blockchain technology are changing the way people think about their ownership rights to digital transactions and everyday payments.

According to Harvard Business Review, cash only accounted for 30% of transactions as early as 2017. Statista reported that US-based businesses processed more than $170 billion in cashless transactions in 2018 alone. Consumers are becoming more comfortable with innovative payment technology as years progress and the standard credit card continues to be the preferred method of payment over cash in the U.S.

More banking and payments brands are actively pushing and advocating contactless payments and many new merchants are joining the party. Incorporating contactless payments options like QR codes and blockchain encourages adoption of new technology among millions of users, especially for merchant partners with retailers and other B2C companies that may bring more customers onboard.

As businesses continue to return to in-person operations in Latin America and around the world, consumers and merchants will continue to rely on payment technology for added convenience, reassurance and reliable banking options for better purchasing power. It is not likely to be disregarded when social distancing eases and may even provide more ways to elevate the consumer experience in the future.