Author: Claudia
Compiled by: Jiahuan, ChainCatcher
The rules of payments in Latin America are being rewritten. 500 hours of field research. Things most fintechs haven't seen.
I spent nearly a month in Latin America with my broken Portuguese and even worse Spanish. Over 500 hours of field research, over 100 hours of flying, speaking with over 100 local users, developers, and more than 10 regulators.
The notes I brought back are different from what most payment professionals on this platform say. Some content is even the opposite of my pre-trip understanding.
In Brazil, the airline lost my luggage. In Mexico, a wheel broke off as it came down the conveyor belt. Friends kept saying I was brave to make this trip alone as an Asian woman.
But what I really want to say is: Latin Americans are the warmest group of people I've ever met. Strangers helped me with directions, translation, and fixing my broken luggage. In Peru, a taxi driver waited 20 minutes for me to figure out which was my booked hotel. In São Paulo, a bartender drew me a map on a napkin to guide me to a meeting I was late for.
For every story that says Latin America is "dangerous," there should be one of a stranger walking me to the right taxi. Even when language fails, the heart understands.
Here's what I learned, some of which I got wrong before this trip.
1. Crypto Cards Win with Cashback?
The real transaction volume of crypto cards doesn't come from retail users' frequent small purchases, but from high-net-worth clients.
The typical pattern I repeatedly saw in Brazil is: a professional receives salary in USD or USDT (often from multinational employers or crypto companies), loads the money into a crypto card, and then withdraws to a local bank account via Pix when Brazilian Reais (BRL) are needed.
Whether it's Kast, RedotPay, or any other crypto card, most transaction volume comes from this group, not from the person buying a $4 coffee with stablecoins.
Brazil received about $5 billion in personal inbound remittances in 2024 (Central Bank of Brazil data), with the proportion arriving as stablecoins rapidly increasing, as employers pay in USDC or USDT to avoid FX friction. Crypto card transaction volume in LatAm is highly concentrated in amounts over $500, typical of professional salary top-ups, not retail spending.
2. QR Codes Are Eating the Next Decade
Everyone is competing in issuing cards and acquiring customers. They're missing the structural shift happening underneath.
In emerging markets, QR code payments are quietly taking over the entire payments market. Brazil's Pix now processes over 6 billion transactions monthly. Argentina is covered in Mercado Pago QR codes. Peru has Yape and Plin. Mexico has CoDi. Merchants don't need POS terminals; customers don't need cards.
This isn't just a LatAm story. Look at the map of global payment dominance:
→ Brazil: 93% QR. Pix dominant.
→ China: 95% QR. Alipay and WeChat Pay have essentially erased cards.
→ India: 91% QR. UPI processes more transactions than all US card networks combined.
→ Indonesia: 75%. Thailand: 62%. Argentina: 61%. Vietnam: 59%. Colombia: 55%. Philippines: 53%. Peru: 50%.
Meanwhile, the US, Canada, Western Europe, and Australia remain card-dominated. Most of Africa and the Middle East remain cash-dominated.
What most Western fintech practitioners overlook is: QR code payments are already the dominant payment method for the majority of the world's population. Card-dominated markets are becoming a shrinking minority, and these markets are precisely where venture capital, payment company headquarters, and most fintech Twitter users are located.
The world's most populous countries are mostly green (QR), and the world's richest fintech ecosystems are mostly blue (cards). This gap is where all the opportunity lies.
Zooming back into Brazil. Pix processed over $3 trillion in transaction volume in 2024, used by about 80% of Brazilian adults. Pix transaction volume surpassed the combined total of credit and debit cards as early as 2023, and the gap is widening. Mexico's CoDi grew 67% YoY in 2024. Argentina's Transferencias 3.0 doubled transaction volume in the same year.
The logic of crypto cards assumes that Visa and Mastercard's card network rails will forever be the primary settlement layer in emerging markets. But the data says that's no longer true. And the speed at which this gap is widening is faster than the speed at which card networks can reinvent themselves.
If you're building a crypto card for emerging market users in 2026, your competition isn't other crypto cards; it's the payment rails that don't need cards at all.
3. The Biggest Unbuilt Opportunity in Payments
Visa and Mastercard unified the fragmentation of card networks, but didn't solve the fragmentation of merchants. Not every small merchant can afford a POS terminal. For a fruit stall, the cost of acquiring just doesn't add up.
QR codes and scan-to-pay solved the "last mile" within each country. Brazil's Pix, Mexico's SPEI, Peru's Yape dominate domestically.
But internationally, it's still fragmented. As a foreigner, you effectively have only two choices:
Option A: Use a Visa or Mastercard to withdraw cash from an ATM. Cost: FX markup, fees, and you can only pay with cash.
Option B: Download a local app. Bind a card, do KYC identity verification. Cost: 3% to 5% FX loss, days of your time, and it only works in this one country.
Both paths end the same: You can only pay in that country. Change countries, everything resets, start over.
One rainy night, sitting in a bar in Brazil wanting to order an espresso martini as a foreigner, my Pix didn't work. My non-Brazilian wallet couldn't talk to the bar's POS (they only accept local payments). The layer of "international interoperability" between countries' instant payment systems doesn't exist yet.
This is one of the biggest unbuilt opportunities in payments.
India's UPI has achieved bilateral connections with Singapore (PayNow), UAE (AANI), France, Sri Lanka, and Mauritius. Latin America's instant payment systems are almost not connected to any system internationally. The Bank for International Settlements' (BIS) Nexus project is working on this, but multilateral interoperability won't happen before 2027.
4. The Competition in Payments Is No Longer About Acquiring Customers, But About Acquiring Settlement
Most companies integrate with a PSP (Payment Service Provider), letting the PSP shoulder the compliance and AML (Anti-Money Laundering) burden. At a small scale, this works.
But leading payment companies are now starting to acquire banks directly. Why? Because owning a bank means doing AML checks only once per transaction, not twice. Settlement is faster; profit is earned, not rented.
Thus, you see Nubank's moves into banking, Brazil's fintech wave of acquiring small banks, and a few stablecoin companies quietly applying for banking licenses.
Brazil now has over 1,400 licensed payment institutions and over 90 chartered banks. The model of "fintechs with banking licenses" is growing 3 times faster than pure-PSP fintechs (Brazil Central Bank 2024 data). In Mexico, having just an IFPE license is no longer enough; top players are seeking SOFOM or full banking licenses for cost reasons.
5. "Latin America" Is Not One Market
Most companies hire one Brazilian as a "LatAm BD" or community manager. This is a mistake.
Argentina is a huge market; the transaction volume there is real. And due to history, culture, and football rivalry, Argentinians and Brazilians don't actually get along well, sometimes calling each other "monkeys" (both ways). Each country has its own currency logic, its own informal economic model, its own diaspora groups, its own history of FX controls.
If you can't distinguish Argentina's currency controls, Brazil's parallel exchange rates, and Mexico Peso's free float, you can't do Latin American payments.
Notable data: Argentina has only 46 million people but over 5 million crypto users (about 11% penetration, one of the highest globally). Argentina's parallel FX market ("dólar blue") makes its demand for stablecoins structurally very different from Brazil's.
Mexico's remittance flow ($65 billion annually) is the world's second largest but is being squeezed both by the US 1% remittance tax (passed Summer 2025) and tighter USD supply from the Mexican central bank.
6. Neo-banks Are Pivoting to FX
That stablecoin conference in Mexico City this year was essentially a remittance and FX conference. Money flowing across borders between different countries, and this flow is being commoditized, turning into a price war.
Margins are approaching zero. My prediction: within the next 6 to 12 months, the cost of converting between USD and USDT will drop to zero in major LatAm corridors. Companies trying to profit from spreads will find themselves squeezed by infrastructure players who treat conversion as a loss leader for larger products.
From July 2023 to June 2024, stablecoin transaction volume in LatAm was about $415 billion (Chainalysis data). Currently, about 71% of LatAm institutions use stablecoins for cross-border payments (Fireblocks 2025 data).
The cost of cross-border stablecoin transfers dropped from 1.5% to 2% in 2023 to 0.3% to 0.8% in 2025. Cost compression is accelerating, with Bitso, Felix Pago, and a dozen smaller players racing to drive spreads to zero.
7. Cross-Border Expansion Is the New Frontier
The classic payments advice is: pick a remittance corridor, dominate it. Build relationships, secure licenses, lock in merchants, become the default.
This advice is breaking down. VCs are now telling me payments are hard to invest in because of over-localization. Each company deepens in one country, takes local profits, but then can't get out. They become king of a corridor but can't be invested in as a cross-regional brand.
The next generation of payments companies needs to have international brand recognition from day one, with tech stacks that can scale cross-border. This is a generational shift in what "good" means in fintech.
Stripe's over $90 billion valuation came from cross-corridor expansion, not single-corridor depth.
Nubank's expansion into Mexico, Colombia, and now eyeing Argentina is precisely this multi-country play that unlocked its valuation, not just its depth in Brazil.
DollarAPP also recently started entering the Brazilian market. Most down-round fintech valuations in LatAm between 2024 and 2025 landed on companies operating in only one country.
8. Brazil and Mexico Are Already Red Oceans
I spoke with Piero del Risco about the "Forgotten Five."
"Think about it. The Dominican Republic, Guatemala, Honduras, Nicaragua, and El Salvador receive about $60 billion in remittances combined. That's roughly equal to the total of Brazil, Mexico, Argentina plus other major markets. But only 8 million remitters serve these 'Forgotten Five,' while 40 million serve the big markets. We moved upstream, became program managers in the US, thus gaining a regulatory moat, providing banking services for remitters at the top of the funnel, and controlling each country's payment rails downstream."
It's not just these five; there are a handful of small countries with a small but concentrated remitter base in the US, receiving nearly as much money as entire "big" markets. Everyone is fighting over Brazil and Mexico; almost no one is seriously building infrastructure for Guatemala or Honduras. Competition density is 5 times lower for the same transaction volume.
A few overlooked corridors I'm watching:
Colombia → Europe (Spain, Italy, Netherlands)
Argentina → Bolivia (small but extremely concentrated)
Venezuela → Colombia (largest non-US LatAm corridor)
Guatemala received $20.3 billion in remittances in 2024 (15% of GDP). Other countries: Honduras $9.7B, El Salvador $8.6B, Nicaragua $4.8B, Dominican Republic $10.2B. Total $53.6B, about 33% of all LatAm remittances. Their combined population is less than a quarter of Brazil plus Mexico, with almost zero fintech competition.
Cost per remittance for the "Forgotten Five" is also higher (6.5% to 8%, vs. LatAm average of 6%), meaning more profit margin to capture.
9. Marketing Budgets Should Be Spent in the Right Place
Take Brazil as an example.
Every fintech selling to "Brazil" treats it as one user segment. It's not. There are at least five different money flow segments in this country, each requiring a different product, messaging, and payment rails. If you can't draw your user's money flow on a napkin, you're spending your marketing budget on the wrong people.
Here are the five segments I mapped out in the field:
Segment 1: Foreign tourists. 9.3 million people in 2025, total spend $7.9 billion (approx. $847 per capita).
Main sources: Argentina 3.4M (price-sensitive, love beaches), Chile 0.8M (high-value), USA 0.76M (high spend), followed by Paraguay, Uruguay, France, Portugal, Germany.
Their money flow is: home country debit/credit card → swipe at Brazilian POS. They never directly touch BRL.
Effective marketing entry points: airport transfers, FX savings vs. home bank, one-tap fee-free payments at attractions.
Segment 2: Long-term expats without Brazilian bank accounts. Venezuelans (79% of Brazil's immigrant population), Haitians, Bolivians, Russians, Chinese, Syrians, totaling about 1.5 million immigrants. 62% already use digital wallets, not traditional accounts.
Their money flow is: International USDT or USD income → conversion → Pix out for BRL spending. This is the highest-value segment for native stablecoin products; USDT to Pix is their killer use case. Zero education cost, direct conversion.
Segment 3: Digital nomads. Concentrated in Florianópolis, Rio, São Paulo, Pipa, Jericoacoara. Mostly Americans, Europeans, Russians, Ukrainians. Income from abroad, often in USDT or BTC. Refuse to open Brazilian bank accounts due to bureaucracy.
Money flow: Crypto wallet → card swipe or Pix out for rent, restaurants, Uber, phone bills. They are not sensitive to FX prices but extremely sensitive to experience. They'll switch providers if it saves one tap.
Segment 4: Young Brazilian digital wallet natives. They have "accounts," but with Nubank, Mercado Pago, PicPay, RecargaPay, not Itaú or Bradesco. They don't feel like bank customers; they feel like app users.
Money flow: BRL salary → digital wallet → Pix everywhere. Crypto exposure is increasing, but the core flow is entirely local. Marketing entry points: cashback, yield, convenience, not "stablecoin rails."
Segment 5: Crypto-native Brazilians. Hold USDT or BTC, often use P2P. Money flow: Crypto balance → P2P or conversion → Pix → spending. Brazil has over 1.5 million active crypto users. This is the easiest segment to convert but also the smallest.
Where most fintechs go wrong is here: they build one product, run one marketing campaign, target the whole of "Brazil." The result is sky-high CAC because segments 1, 2, 3, 4, 5 need completely different acquisition channels, completely different messaging, completely different money rails.
Conversion rates for Russian YouTube ads targeting digital nomads in Florianópolis are worlds apart from Portuguese Instagram ads targeting young Brazilians in São Paulo. Venezuelan immigrant WhatsApp groups in Roraima perform completely differently from US travel influencer partnerships targeting tourists.
After mapping these segments, the framework I use for any Latin American country is:
If you can't answer these five questions for each priority segment, you're not ready to spend marketing budget. You should do more user research.
The same logic applies to every Latin American country.
The Brazil example can be directly mapped to Mexico (remittance senders from US, Mexican professionals, US-Mexico cross-border SMEs, crypto-native youth, unbanked rural population), to Argentina (blue dollar holders, dollarized-wage professionals, crypto-native traders, MercadoPago users, tourism arbitrageurs), and to every market in the region.
Don't ask, "Should I do Brazil?"
Ask, "Which of these five Brazils am I doing?"
That's the only question that turns LatAm expansion into an investable business, not a money pit.
10. On Regulation, Latin America Is 5 Years Ahead of the US
I spoke with over 10 regulators during the entire trip. The biggest surprise was that they weren't fazed at all by stablecoins, P2P rails, crypto-fiat interoperability.
The Western narrative on LatAm regulation is "fragmented, slow, backward." On the ground, the opposite is true. The US is playing catch-up.
Brazil. The central bank built Pix in 18 months and made it free on the payment side, something the Fed is still studying. The crypto regulatory framework is now set: Resolutions 519, 520, 521 issued November 2025, effective February 2, 2026. The hard deadline for existing VASPs to apply for authorization is October 30, 2026.
After that, every institution regulated by the Brazilian Central Bank, including every Brazilian bank, every payment processor, every Pix service provider, is prohibited from conducting virtual asset business with unlicensed counterparties. Read that sentence again.
This deadline isn't "you need a license," it's "if you don't have a license, every Brazilian bank you work with is legally required to cut ties with you." At the time of writing, roughly 4 months left.
Mexico. Mexico passed its Fintech Law in 2018, while the US has no federal fintech law as of 2026. The Mexican central bank's IFPE plus remittance license framework is built precisely for cross-border digital money flows. The US just passed a 1% federal remittance tax in Summer 2025 (the "Big and Beautiful Act"). Mexican regulators noticed this earlier than US fintech practitioners. Several told me they are adjusting licensing strategy to capture money flows that will bypass US cash channels.
Colombia. The Financial Superintendence approved Bancolombia's COPW Peso stablecoin in 2024, an end-to-end regulated commercial bank stablecoin. The Fed hasn't approved any US bank stablecoin yet.
Argentina. Despite the central bank banning banks from touching crypto in 2022, the new VASP licensing sandbox (launched 2025) is more lenient than New York's BitLicense. Argentine regulators told me directly: "We can't stop dollarization; we can only make it safer." This level of candor is something most US regulators don't have in public.
Costa Rica and Paraguay. Both are running stablecoin remittance sandboxes, with clearer licensing paths than over 30 US states.
The most surprising part was this: LatAm regulators don't want to slow stablecoin adoption. Several proactively asked me, "How do we make it safer for our citizens?" rather than "How do we stop it?"
This isn't a regulatory environment that's "behind" the US. It's a regulatory environment that's ahead of the US, already past the existential debate the US is still stuck in.
If you're doing cross-border in LatAm and still waiting for "regulatory clarity," you've misread the situation. Clarity has been here.
The ambiguity is on the US side of the corridor.
Honestly, most of these points were the opposite of my understanding before the trip.
What hit me hardest was point #6. I went to LatAm thinking stablecoins were a structurally high-margin business. The reality on the ground is they're already racing to zero.
The winners won't be those with the best conversion channels, but those who build the next layer (wallet, cards, yield, brand) best on top of conversion.
To every taxi driver, bartender, bank manager, and regulator who took the time to explain things to a foreigner with bad Spanish and worse Portuguese.
The wheels on my suitcase will get fixed eventually.
But what I learned on this trip won't wear down.
