Over my more than two decades working for Visa, I’ve never seen such an accelerated adoption of new payment technologies by consumers, businesses and financial institutions in Latin America and the Caribbean (LAC). We’ve reached unprecedented levels of growth in the penetration of our most popular payment technologies rooted in our consumers’ growing desire for convenience, immediacy and peace of mind when paying for things or services, while businesses want the benefits of receiving digital payments.
The examples are clear: consumers are increasingly using contactless payments; micro and small businesses count on their smartphones to receive digital payments; digital and financial inclusion is growing with the adoption of digital payments in urban transportation; e-commerce shows a steady growth; security continues to increase with rising token technologies; and consumers transfer funds amongst themselves with digital technologies more and more frequently.
If I dig a little deeper into this significant moment, what has really helped us achieved these results is our ongoing emphasis on understanding the needs and priorities of the consumers, and our strong emphasis on solving our clients’ unique needs across markets and working very closely with our financial institutions and industry partners to bring all these technologies to market. These two fundamental elements have allowed us to accelerate the digital transformation of the entire payments ecosystem and coincide 100% with recent reflections that clients from LAC shared with me and colleagues from other regions of the world.
The path is clear and remains at a strong pace. Let’s get for example into Tap to Pay, where Visa has been a prime mover in the implementation of this technology across the world. Very recently, we reached 50% of contactless transaction penetration in LAC in just four years since we started implementing the technology. This means that in the entire region, more than half of transactions made in person are contactless. In most key markets the penetration is way more. We’ve also seen healthy growth in other metrics in the region including a 69% growth in contactless transactions as of December 2022, compared with December 2021.
What we’re seeing here is that once consumers try Tap to Pay for the first time for their everyday errands, there is no turning back. They love the technology as it’s convenient, fast and secure. All consumers need to do is simply bring their contactless cards, mobiles, or wearables close to a payment terminal to pay for things in just seconds. And the same thing is happening in the mass transit segment with Tap to Ride.
Our Tap to Ride technology, which works just like Tap to Pay but tapping contactless cards, mobiles, or wearables over the payment machine before onboarding a bus, metro or any other transportation system that offers this new technology, have also seen impressive growth over the past years. We recently crossed the one billion transaction milestone on global transit systems during fiscal year 2022. Our urban mobility transactions in LAC have also grown 75 times since December 2019, we’ve launched 22 urban mobility projects in 10 cities and 7 countries for public buses, metros and tolls, with many more underway this year. This is exciting, particularly in LAC where the transportation segment plays a key role in driving digital and financial inclusion.
In the same line, with Tap to Phone, a solution that allows small business to simply download an app on their smart-phones and this instantly turns their phones into contactless terminals to accept payments easily. We are also at the forefront of accelerating its implementation with more projects in development in LAC than in other parts of the world. Together with our partners, we’ve been able to enable more than 250,000 mobile phones as terminals and affiliate more than 25,000 businesses in Brazil, Costa Rica, Guatemala, Peru and very recently in Colombia.
Another crucial area that is witnessing an accelerated growth in the region is e-commerce where we’ve made significant progress on digitally enabling over 40 million small and micro businesses worldwide at the end of FY22 with a variety of digital platforms and tools to help them start selling online. Cybersource, a Visa solution to accelerate secure online business, has also played a key role in bringing together thousands of acquirers and merchants from the region to accept digital payments in the e-commerce space, while effectively managing fraud detection, resulting in increased consumer satisfaction and higher sales online.
But with all these advancements comes a growing imperative of protecting digital transactions. What we’re seeing now is an accelerated token adoption in the region and we expect this to have a very positive impact on our issuers and merchants in terms of fraud. With Visa’s token technology, transaction data is protected by replacing sensitive cardholder information with a unique token or digital identifier that can be securely deployed into different devices or stored in the cloud. In fact, as of the end of September 2022, more than 90% of Visa’s payment credentials in LAC were token ready and we recently crossed the historic milestone of issuing more than 4 billion tokens globally, surpassing the total number of our physical cards in circulation, which is also incredible.
I also want to spotlight our growth performance in the real time money transfer segment. Visa Direct, our solution to almost instantly send or receive money domestically or globally between people (P2P) or companies (B2B) where the programs are active, grew by more than 35% at the end of FY22, reaching nearly 6 billion global transactions. In LAC, we continue leading this space with Visa Direct programs live in 11 countries as of December 2022, and when we look by country, we have more than 25 domestic and cross-border P2P relationships.
All these outcomes are incredible and just give us an idea on what’s to come. Our journey of breaking down barriers to connect more people into the global digital economy is more alive than ever. This also highlights an important point which is the responsibility we must continue pioneering payment technologies to help drive the new innovations we believe will shape the future of money movement including greater interoperability, digital identity, open data, contextual commerce, Web3, new models such as the creator economy and the Metaverse.
So, I think the future is bright for Latin America and the Caribbean. With our leadership and industry influence, we have a unique perspective on how payments are evolving, and this inspires us to continue accelerating and scaling up the adoption of more accessible digital technologies to help everyone thrive and truly unlock the power of digital commerce for everyone, everywhere.
