How do we pay, and who benefits from payments? Understanding Payment infrastructures in Latin America

Although we make payments daily, the industry behind these processes remains opaque. In advanced economies, the payment industry profits average about $1,000 per person annually. How the payment industry makes money profoundly affects access to essential banking services and determines the conditions under which the upper, middle, and lower classes have access to financial services. Therefore, constructing payment systems is not just a technical matter but also a political one that profoundly shapes social inequalities. Latin America has traditionally been one of the unequal regions in the world. But although inequality in the region remains high, it is worth asking whether the dynamics that keep it in place are the same as they used to be. This paper focuses on understanding how the dynamics of the payments industry contribute to increasing inequality in Latin America. In recent decades, global processes, such as the massive digitization of payments, have reshaped our payment infrastructures worldwide, reopening the social debate. While for some, the emergence of new players in the field of payments, such as FinTech, can help promote financial inclusion in the Global South; for others, the increasing globalization and digitization of financial markets have only further empowered private companies that increasingly have a monopoly over the infrastructures that allow us to pay. This paper seeks to characterize the political economy of payments in Latin America. By outlining how new and old actors participate in this space today, the paper seeks to provide analytical tools that help us analyze the payments space in Latin America as a new sector of social struggles.