National Hispanic Heritage Month is an annual celebration of the Hispanic community's influence and contributions to the culture, history, and achievements in the United States. The celebration that began in 1968 started as a week-long event and was later extended to a month-long festival from September 15 to October 15 as several LATAM countries celebrate their independence during this period.
Despite facing a disproportionate impact from Covid-19, US Latinx, who constitute the fastest-growing portion of the US GDP, have displayed remarkable resilience and determination both in the economy and beyond1. Nationwide, 61% of US Latinx reported job or income loss in the household during COVID-19, a figure far higher than that of non-Latino Whites (38%)2. It is vital to recognize and invest in diverse and underrepresented communities, such as the Hispanic community. The commitment to diverse communities not only fuels the overall growth of our economy, but also underscores the importance of recognizing cultural differences. It is crucial to understand that various communities have unique needs, and they seek individualized products and offerings that reflect these needs. By investing in diverse communities, we can make the greatest impact on social cohesion and reduce inequality.
Because October is Hispanic Heritage Month, we are focusing on what the Hispanic community needs from banks and financial technology companies to address their needs. In our 2023 State of Payments Report we (along with Propeller Insights) surveyed over 4,000 consumers across three countries, including 2,000 in the US, to get a sense of current consumer purchase preferences and how they want to pay, bank, and shop.
Here is a glimpse into the data around Hispanic communities:
- Hispanic Americans report higher reliance on Embedded Finance solutions, such as Accelerated Wage Access
- Hispanic Americans are more interested in using embedded finance solutions than non-Hispanic Americans. The survey revealed that 59% of Hispanic Americans are interested in using embedded finance solutions as compared to 46% of non-Hispanic Americans.
When asked if they were interested or using these types of features respondents said:
- 77% of Hispanic Americans saying they have used or are interested in using early direct deposit services compared to 65% of non-Hispanic Americans.
- 64% of Hispanic American respondents used or are interest in using paycheck advance features compared to 50% of non-Hispanic Americans.
- Hispanic Americans surveyed said they are using or are interested in using automated and round-up savings plans with 78% using automated savings and 75% using round-up savings compared with 68% and 65% of non-Hispanic Americans, respectively.
When it comes to the payment methods of choice:
- Hispanic Americans use credit cards, debit cards, and cash in almost the same proportion as non-Hispanic Americans.
- A significant number of Hispanic Americans are using mobile wallets, with 61% of Hispanic Americans using the service in the past thirty days compared to 44% of non-Hispanic Americans.
- 53% of Hispanic Americans report using online banking compared to 39% of non-Hispanic Americans.
- A higher number Hispanic Americans surveyed reported using Buy Now, Pay Later services (36%) compared to non-Hispanic Americans (27%) it in the past 30 days
- Peer to peer payments 2P with 80% of Hispanic Americans surveyed saying they use the solutions, usage (compared to 71% for non-Hispanic Americans)
National Hispanic Heritage Month is an opportunity to celebrate and better understand the Hispanic community's contributions to the American economy. Hispanic Americans have unique spending patterns, with a higher tendency to use digital services such as mobile wallets and automated savings plans.
As the financial industry looks to embrace the opportunities that will come from the expansion of embedded financial offerings, the Latinx community is one of the many communities that could benefit from these newly integrated and easily accessible tools. From shopping, to paying bills to sending money to friends and family, the opportunities to build more equitable and personalized financial offerings across multiple platforms is something more people should be talking about and more importantly, working towards bringing to life.
To learn more about current payment trends, visit our 2023 State of Payments Report.
1The economic state of Latinos in the US: Determined to thrive, Mckinsey, Nov 2022
2Latinos and the Pandemic: Results from the National Social Life, Health, and Aging Project—COVID-19 Study, National Library of Medicine, May 2022
