The consumer-packaged goods (CPG) industry is at a turning point, with digital payment solutions emerging as a game-changer for small retailers and suppliers in the traditional trade sector. A newly released whitepaper commissioned by Mastercard sheds light on a $448.4 billion digital payment opportunity across 11 countries in the Latin America and Caribbean (LAC) region and the United States. With a specific focus on the evolving CPG landscape in LAC, the research identifies key trends accelerating transformation in this segment, barriers that must be addressed, and recommendations for industry players to unlock growth.

The Traditional Trade Payment Gap: A $448.4 Billion Opportunity

The CPG industry represents an important segment in the region’s financial inclusion progress. According to the whitepaper, Transforming payments: Digital solutions for traditional trade in the CPG industry, nearly 12 million traditional trade retailers operate across the surveyed countries, ranging from convenience stores to small independent shops. These businesses account for $362 billion in B2C sales, with 43% of transactions still conducted in cash—representing a $155 billion opportunity for payment digitalization. An even larger opportunity lies in B2B transactions between small retailers and suppliers. The report estimates that 90% of B2B payments—totaling $293.4 billion—are still handled in cash, checks, or bank transfers.  

Together, these B2C and B2B figures highlight a $448.4 billion opportunity for digital payment adoption. For financial service providers, fintech companies, and CPG brands, digitizing even a fraction of this market could accelerate financial inclusion and operational efficiencies throughout the region. While small retailers provide essential goods and employment, their reliance on cash transactions keeps them excluded from the formal financial system, limiting their ability to access credit, and opportunities to grow their business. At the same time, as consumer preferences continue to shift toward digital options, empowering small business owners with digital payments solutions allows both financial institutions and CPG companies to drive broader economic growth across the region.

Five Trends Driving Digital Payments in the CPG Sector

While still in early stages, CPG companies are leveraging technology and partnerships to modernize the traditional trade channel. The report identifies five emerging trends that are reshaping payments in the industry:

1. B2B E-commerce Platforms: Digital ordering systems have allowed small retailers to place orders online, improving inventory management and reducing reliance on cash-based transactions.
2. Conversational Commerce: Retailers can now order products and access customer support via instant messaging app platforms.
3. B2B Marketplaces: Newer platforms are helping CPG companies showcase products and manage invoicing, streamlining the supply chain.
4. Embedded Credit Solutions: Fintech partnerships are providing microcredit to small retailers, enabling them to grow their businesses without reliance on informal lending.
5. Instant Digital Payments: CPG Companies are embedding instant and contactless payment capabilities within their supply chain processes.

"The digitalization of payments in the traditionally cash-heavy trade sector represents one of the most significant untapped opportunities in the CPG industry today”, said Walter Pimenta, Executive Vice President, Commercial and New Payment Flows, LAC. “For professionals in the CPG and banking industries, this report serves as a blueprint for action. At Mastercard, we’re committed to building the partnerships and offering the technology needed to accelerate this transformation and create lasting value for retailers, suppliers, and consumers."

Strategic Recommendations for Industry Leaders

Often operating on thin margins, small retailers in the CPG industry are cautious about incurring added costs, especially as many traditionally relied on cash and may remain skeptical about a need for change. To accelerate digital transformation, the report outlines five strategic actions for businesses in the CPG and financial sectors:

1. Build Scalable Digital Infrastructure: Invest in mobile-friendly, cost-effective platforms to support small retailers.
2. Promote Financial Inclusion: Provide tailored financial solutions that accelerate sustainable growth and credit access to small businesses.
3. Support Digital Training & Adoption: Develop easy-to-use applications and offer educational programs to help retailers transition to digital tools.
4. Create Personalized Retail Partnerships: Leverage AI to customize promotions and product offerings.
5. Foster Strategic Ecosystem Collaborations: Engage in partnerships with fintech firms, payment networks, and CPG brands to build a sustainable digital payments ecosystem.

The traditional trade sector remains a critical component the CPG industry, and modernizing its payment infrastructure benefits all stakeholders. By enabling small retailers to transition from cash to digital payments, industry players can usher in a new era of financial inclusion and business resilience across Latin America and the Caribbean.