Unlocking new potential: Bringing integrated payments into Latin America’s fragmented markets

Latin America (LatAm), with nearly 700 million people and exports valued at over $1.3 trillion annually, is also the region to watch when it comes to digital payments. Under the leadership of countries like Brazil, Mexico, and Argentina, the region has been notoriously innovative in the payments space. With the recently enacted free trade agreement between the European Union (EU) and the South American trade bloc Mercosur, the region has gained increased access to global markets. If they play their cards right, LatAm’s emerging economies may have the opportunity to cement their position as global suppliers for key commodities – including now-precious crude oil and agricultural goods. 

However, while countries across the region are moving towards real-time payments, they face a series of complications: legacy infrastructure designed for single markets, fluctuating currencies, and fragmented legislation across jurisdictions, at least when it comes to regulatory philosophy. 

For LatAm suppliers to reach their full potential, the region’s open mind towards digital payments has to translate into an openness for technology that interweaves multiple systems. Trade Finance Global’s (TFG) Doğa Usanmaz heard from Radi El Haj, CEO of RS2, on what the region needs and demands to facilitate its digital transformation. 

Doğa Usanmaz (DU): What is the current state of digital payments infrastructure across LatAm’s cross-border transactions? How does it differ from other emerging markets?

Radi El Haj (REH): LatAm has made significant progress in domestic digital payments and real-time payment adoption, but cross-border infrastructure remains highly fragmented. Many financial institutions are still operating across disconnected legacy systems for issuing, acquiring, and settlement, which creates inefficiencies when scaling regionally.

But what makes LatAm distinct from many other emerging markets is the combination of strong digital growth and complex multi-market operating environments. Banks are dealing with different regulations, payment schemes, and infrastructure maturity levels across the region.

What we are increasingly seeing is demand for modern core processing platforms that can support multi-country operations through a single infrastructure model. 

DU: How can digital platforms help build interoperability between payment infrastructure across the region’s diverse and often fragmented markets? 

REH: Interoperability starts with infrastructure architecture. Historically, many banks have built separate systems for issuing, acquiring, and ledger management, often market-by-market. That creates operational complexity and limits scalability, making cross-border expansion more difficult.

Modern integrated platforms change that dynamic by bringing these functions together within a single processing environment. This gives institutions greater visibility, control, and consistency across markets, while reducing the need for multiple integrations.

What banks increasingly want is the ability to modernise once and scale regionally through that foundation. 

DU: To what extent is there uneven technological availability and payment infrastructure adoption between different countries in the region? 

REH: There is still considerable variation across the region. Some countries have highly advanced digital payment ecosystems and strong real-time infrastructure, while others are at an earlier stage of modernisation. However, the gap is narrowing as digital adoption accelerates and financial institutions increasingly look beyond domestic markets and towards regional growth. Banks are prioritising scalable infrastructure that can support both mature and developing markets within a single architecture.

That shift is important because it moves institutions away from fragmented country-specific systems towards more integrated processing models that can evolve alongside market demand and regulatory change.

DU: LatAm is home to complex regulation, stemming from a multitude of legal frameworks. How is the current digital payments environment shaped by diverging regulations? To what extent is regulatory dissonance the biggest barrier to digital adoption across the continent? 

REH: Regulatory complexity is certainly a factor in LatAm, particularly for institutions operating across multiple jurisdictions. Different compliance frameworks, local requirements, and market structures all add operational pressure. That said, regulation is not the only challenge, and often not the biggest one. In many cases, the underlying issue is legacy infrastructure. Older processing environments make it difficult for banks to adapt quickly, launch new services efficiently, or scale across markets.

Modernising core payments infrastructure gives institutions far greater flexibility in responding to regulatory change, while also improving operational resilience. That is why infrastructure transformation has become such a strategic priority for banks across the region.

Any institution operating across multiple LatAm jurisdictions feels the effects of regulatory complexity: different compliance frameworks, licensing requirements, local scheme rules, and data residency obligations all create operational weight. But, if you ask most banks what their biggest day-to-day constraint is, the answer is usually infrastructure.

Legacy processing environments were built for single-market operations. They were never designed to absorb regulatory changes quickly or scale across jurisdictions. So when regulations shift – and in LatAm, they shift frequently – institutions on older systems struggle to respond efficiently. The compliance burden becomes amplified by technical debt.

The institutions managing this most effectively are those that have modernised their core processing infrastructure first. That foundation gives them the agility to adapt to regulatory change without rebuilding from scratch each time. Regulation will always evolve; the question is whether your infrastructure can keep pace.

DU: How can digital currencies and blockchain technology improve the cross-border connectivity of LatAm payments?

REH: There is potential for technologies such as blockchain and digital currencies to improve areas like settlement efficiency and transaction transparency in certain cross-border use cases. However, the industry conversation can sometimes focus too heavily on emerging technologies before addressing the underlying infrastructure challenge.

The immediate priority for most banks is modernising core processing systems so they can operate more efficiently across markets, payment schemes, and currencies. Without that foundation, it becomes difficult to scale new technologies effectively.

We see tokenisation and digital asset innovation as part of the broader evolution of payments infrastructure, but they need to sit within secure, scalable, and fully integrated processing environments to deliver long-term value.

There are genuine near-term applications worth taking seriously. Stablecoins are already being used in certain corridors. In 2025, 71% of Latin American institutions were reportedly already using stablecoins in cross-border payments, ahead of the global average of 49%. According to research by Mizuho, stablecoin fees for the US-Mexico corridor are also below 1% – strikingly low compared to the 5-7% averages of traditional channels. 

This is particularly valuable to reduce foreign exchange (FX) friction and settlement delays, particularly relevant in a region where currency volatility and correspondent banking costs are persistent challenges. Blockchain-based settlement also has real potential in trade finance, where transparency and finality matter greatly.

That said, the infrastructure layer beneath these technologies often gets overlooked. A bank running fragmented legacy systems will struggle to integrate or scale digital asset capabilities effectively, regardless of how promising the technology is. The foundation has to be right first.

Our view is that tokenisation and digital currencies are a meaningful part of where payments are heading, but their value is only fully realised when they sit within modern, integrated processing environments that can handle multi-currency operations, compliance, and settlement at scale. Technology and infrastructure need to evolve together.

DU: How can an integrated payments infrastructure help boost the region’s export potential? 

REH: Efficient payments infrastructure plays a critical role in enabling trade and economic growth. For exporters and businesses operating across borders, the ability to move funds quickly, securely, and transparently has a direct impact on cash flow, operational efficiency, and market competitiveness.

Integrated processing infrastructure helps reduce friction across the payment lifecycle by improving settlement efficiency, increasing visibility, and simplifying cross-border operations. It also enables financial institutions to deliver more seamless services to merchants and corporate clients operating internationally.

As LatAm continues to strengthen regional and international trade relationships, modern payments infrastructure will become increasingly important in supporting long-term economic expansion and cross-border commerce.