Apple Pay is on its way to Mexico, bringing the app to a region eagerly awaiting Apple’s continued expansion in Latin America.
Mexico will be the second Latin American country to support Apple Pay, after Brazil. The enthusiasm is part of the reason travel brands and especially airlines operating in Mexico should be integrating Apple Pay into their payment mix sooner rather than later.
Today, Apple Pay accounts for 5% of all card transactions worldwide — and is projected to grow to 10% in the next five years. Consumers in Mexico already show an affinity for digital wallets. The 17% adoption makes it the second-most used payment method for e-commerce.
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Mexico is likely to see as high or higher initial Apple Pay adoption rates than comparable countries like the U.S. which already show an increasing appetite to use Apple Pay for travel purchases. Notwithstanding the COVID-19 impact on airlines, digital wallets and specifically Apple Pay outperformed traditional forms of payments for the majority of 2020.
Apple Pay offers a slick user interface and seamless checkout ability and it also eliminates redirects and overlays. But the demand for Apple Pay will also be driven by a well-established fear of credit card fraud in the region, making consumers hesitant to store their card details at the merchant level.
Apple Pay’s encryption and biometric authentication features alleviate these fears, which facilitates faster, frictionless repeat purchases for merchants, including travel brands. Incorporating Apple Pay into a user-friendly checkout flow can help meet this demand while simultaneously boosting revenue and trust.
Fraud fears are present elsewhere in Latin America, but the region's already widespread use of mobile and digital payments is driven more by a relatively low card penetration rate and a higher than average rate of smartphone ownership. The COVID-19 crisis has accelerated the growth of alternative methods of payment across the globe, and the same is true in Mexico and other Latin American countries as consumers turn to mobile wallets for safer, contactless method of payment.
For all of these reasons, Apple Pay is poised to have a very successful launch in Mexico this year. Airlines and travel brands that want to tap into the Mexican domestic market or expand their reach internationally should already be planning to support Apple Pay when it becomes available, either by building out support capabilities internally or partnering with a payment provider that offers fast rollout of numerous alternative payment methods such as Apple Pay or other global or local ones. By doing so, they will be meeting Mexican consumers' payment expectations, making travel easier and positioning themselves to gain market share in 2021.
