Current scenario of subscription billing in Latin America

Latin America is the second fastest-growing streaming market in the world and this is linked to recurring billing methods and localized market strategies.

João Paulo Notini
March 18, 2022
8 min read

The subscription economy in Latin America (LatAm) has a lot of opportunities and recurring billing is an intrinsic part of it. Also, when talking about subscriptions, it is impossible to not address streaming services. Global techs such as Spotify, Netflix, Deezer, Disney+, Amazon Prime Video, and many others, are all part of LatAm’s fast growing streaming market. 

Pushed by mobile and internet penetration, subscription model businesses are investing in new technologies and market strategies to reach more Latin American consumers. So, here is where recurring billing with the right local payment methods can make the difference. In this article, we will explore what has been driving the streaming market in LatAm and the local subscription billing landscape.

Latin America’s streaming market

Despite counting with several global streaming businesses, LatAm is the second fastest-growing market for video and audio streaming services, according to a study provided by Netscribes (a global data and insights firm). The region already surpassed the US and Europe on market size and is expected to reach USD 7 billion in 2021, as pointed out in our Beyond Borders 2021/2022 report.

Internet and mobile penetration as growth enablers

The size of the opportunity is definitely huge. So, what has been pushing this strong streaming services growth in LatAm? Bhavna Chandna, Senior Analyst from Netscribes, believes that the pandemic wasn’t the main reason for this phenomenon. Yet, the higher penetration of internet services, both fixed and mobile across the region, are driving the demand. 

“This is what has been driving growth in the streaming market in Latin America. The pandemic was just another push, and all of that, combined with the arrival of 5G technology in the region, will further drive streaming services penetration”, said Chandna in our Beyond Borders study.

When we analyze mobile penetration in LatAm and streaming service consumers preferences, it becomes more clear. Smartphones are the most used devices among Latin Americans who consume video and audio streaming services, as informed in a Penthera report

Source: adapted from Penthera

The Groupe Speciale Mobile Association (GSMA) estimates that, by 2025, mobile penetration in LatAm will be at 73%. Smartphones are also expected to account for 80% of all internet connections in the region, according to a GSMA study. This means that being mobile-first is more than a strategic need, but a matter of survival. 

Choosing, however, which device is going to be used, is worthless if there is no internet connection available. A 2020 study conducted by the Inter-American Development Bank (IDB) showed that around 70% of Latin Americans have internet connections. Thus, since the beginning of the last decade, LatAm’s massive improvements in terms of internet penetration were a huge contributor to drive mobile penetration and, consequently, streaming services demand. 

Uncovering the recurring billing’s landscape

After this short overview about streaming services in LatAm and how mobile and internet penetration have been playing a key role on it, it is time to explore the region’s payments landscape when we talk about recurring billing. 

Cards are kings, but have a downside

Taking Brazil as a reference, the most common payment method accepted for subscription payments are credit cards. Debit cards come right after, with an increasing adoption. By 2020 there were more than 116 million active debit cards, and about 59 million with access only to this payment method. Our data shows that, pushed by the pandemic, subscription transactions with debit cards more than doubled in one year (from October 2019 to September 2020).

There is, however, a great downside in regards to cards. According to our Beyond Borders 2021/2022 report, there aren’t sustainable payment options for recurring services in LatAm. Why? Because credit cards are only accessible to only a third of the local population. Besides this problem, about half of Latin Americans are unbanked. So, this poses the question: how businesses that rely on recurring billings can give access to more consumers? The answer relies on alternative payment methods.

The rise of Alternative Payment Methods 

While fintechs are constantly developing and optimizing recurring billing solutions, alternative payment methods (APMs) are gaining traction by giving access to consumers that lack credit cards or bank accounts. 

APMs include digital wallets, instant payments, online debit, bank transfers, SPEI and any local payment that differs from cash, credit card or other traditional payment methods. They have also been optimized with recurrence features and here are some successful examples of it:

MercadoPago and Nequi – both are great digital wallet examples, with the first being also a fintech arm of regional behemoth MercadoLibre and, the second, a popular Colombian financial platform. They have adopted tokenization for recurring payments, which is a feature that enhances transaction security and ensures recurrence with higher approval rates. Both digital wallets also have enabled QR code payments, which makes recurring transactions more convenient. 

“These wallets are borrowing concepts from other payment methods while capturing a new and incredibly relevant consumer segment. It is a very transformational moment for the industry.” said Andre Allain, EBANX VP of Growth.

We have also seen how important it is being mobile-first and, on payments, that couldn’t be different. Digital wallets, in general, are highly optimized for smartphones and most of them enable a subscription service provider to contact its customers by sending push notifications and alerts about a lack of balance, or any other problem during the payment processing. 

PIX – the famous instant payment of Brazil has been adopted by over 60% of all Brazilians. Launched in November of 2020, by the Central Bank of Brazil (BCB), the goal was to revolutionize the market from day one. And it did it! Besides performing transfers in less than 10 seconds, PIX users don’t need to have a bank account. 

The system is highly mobile optimized and has been constantly updated with new features, including a recurrence option. This option allows a business to charge their clients through QR codes, which can be sent automatically every month, for example (depending on the desired recurring billing period).

Prepaid cards 

According to our internal data from 2020, prepaid payments represented 15-20% for the whole subscription market. In Argentina, for example, it had only a 8.7% share of the total amount transaction. On the other hand, in Colombia, its importance was much higher, since it  accounted for 25% of all subscription transactions. 

Prepaid cards have also been growing in preference over cash, for the simple fact that they don’t require maintenance costs or commissions to be used. In addition, it is easy to have one: it only requires a personal identification document. 

Partnerships for recurring billings

Despite investing in APMs, streaming businesses are partnering with local telecom companies in LatAm to use their billing and collection processes for subscribers. Through low-price bundle offers they can address the recurring payment issue, tap each other’s customer base and grow together.  

Examples of this strategy across the region include: in Mexico, HBO Max joined forces with AT&T; in  Costa Rica and Honduras, Paramount+ is offering its premium content to Millicom’s cable TV subscribers; while Disney+ teamed up with several telecom companies in Argentina and Brazil to offer free trials and bundle services.


Mobile and internet penetration have definitely contributed to streaming services growth in LatAm and, consequently, pushed recurring billing models. The size of the opportunity is huge and, although credit and debit cards are still the most used options for recurring transactions, alternative payment methods are on the rise. 

With new recurrence features, local payments are allowing global digital companies to expand their addressable market in LatAm. They are giving access to a great share of Latin Americans that lack credit cards nor a bank account. 

Furthermore, streaming players are reinventing their market strategies. They are increasing their customer base through partnership initiatives, and finding new ways to make their recurring payment process easier and more convenient. What’s next? Let’s see, but the future of recurring billing seems very promising!

E-book: Subscription Billing in Latin America

The subscription model has gained Latin America. See all key market details and how to succeed there
João Paulo Notini
João Paulo Notini
Senior Content Marketing | Cross-Border operations at EBANX

EBANX Retail & Marketplace Solution

It’s time to enhance your retail marketplace in Latin America with a tailored approach to payments.

Report: Gaming in Latin America

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