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Drivers of Digital Payment Adoption: Lessons from Brazil, Costa Rica, and Mexico

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  • David Argente
  • Paula Gonzalez Alvarez
  • Esteban Méndez
  • Diana Van Patten

Abstract

Digital payment platforms can displace cash and extend financial services to underserved populations, yet many adults worldwide remain unbanked. Leveraging granular microdata on individual transactions and user characteristics, we argue that broad cash substitution via peer-to-peer (P2P) platforms depends on a “rapid low income-gradient”, the speed at which adoption spreads from affluent early users to lower-income groups. In three Latin American cases, Brazil’s Pix, Costa Rica’s Sinpe Móvil, and Mexico’s CoDi, we document that low adoption costs, strong network effects, coordinated supply-side integration, and early awareness efforts enabled Pix and Sinpe Móvil to reach nearly all income segments within five years, whereas CoDi remains characterized by low usage and predominantly high-income adopters.

Suggested Citation

  • David Argente & Paula Gonzalez Alvarez & Esteban Méndez & Diana Van Patten, 2025. "Drivers of Digital Payment Adoption: Lessons from Brazil, Costa Rica, and Mexico," NBER Working Papers 34280, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:34280
    Note: DEV EFG ME
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    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

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