Digital payment adoption is accelerating across Panama, yet cash remains a stubborn fixture in daily transactions. New data from financial sector representatives reveals that 81 percent of Panamanian consumers now use digital payments. The findings were presented this week by Mastercard executives in Panama City.
Soledad Rovira, the country manager for Mastercard in Panama, presented the key findings during a financial technology briefing. Consumers are ready for digital tools, she said, but merchants still create barriers. The gap between consumer willingness and merchant acceptance creates friction in the marketplace.
“81 percent of consumers in Panama use digital payments and 90 percent recommend them. However, 62 percent still report that at least once a month they must use cash when they want to use digital payments.” [Translated from Spanish]
Rovira emphasized that pushing toward payment digitalization represents a major opportunity. It can boost the economy and strengthen Micro, small and medium enterprises in Panama. These businesses form the backbone of the national economy.
“Digital payments are more secure and also reduce costs related to cash handling. In Panama, 97 percent of businesses are micro, small and medium enterprises, although they contribute about 20 percent of the Gross Domestic Product,” Rovira said.
Cash Culture Persists Despite Consumer Readiness
The data shows a clear disconnect. Most Panamanians want to go digital. But they can’t always do so. The problem lies in merchant acceptance and infrastructure gaps.
Consultant Arturo Arango offered a broader regional perspective. Panama holds a favorable position compared to other Central American countries in digital transformation and payment systems. That advantage matters for attracting investment and fostering innovation.
Arango acknowledged a significant challenge. A deeply rooted cash culture persists among both the population and certain commercial sectors. This cultural attachment to physical money continues to slow the acceleration of electronic payment adoption across the country.
The findings align with broader trends in Digital payments in Panama. The country has made strides in financial technology but still lags in universal merchant adoption.
Economic Impact and Business Opportunities
Small businesses stand to gain the most from this transition. Cash handling costs eat into already thin profit margins for micro and small enterprises. Digital payments reduce theft risks and accounting errors.
The 97 percent figure for small and micro businesses is striking. These enterprises employ a massive portion of the workforce. Yet they contribute only about one-fifth of the GDP. Digital payments could help formalize these businesses and expand their economic contribution.
Rovira stressed that security is a major driver. Digital transactions leave an electronic trail. This reduces fraud and makes tax compliance easier for business owners who want to operate legitimately.
Next Steps for Digital Payment Expansion
Industry observers say the path forward requires merchant education and infrastructure investment. Banks and payment processors need to make terminal costs more accessible. Small shop owners often cite equipment costs as a barrier.
The Panama City government has already moved toward digital systems for permits and municipal services. This creates a model for broader adoption across the country.
Arango suggested that government leadership could accelerate the shift. When public services require digital payments, citizens adapt quickly. The private sector must follow with competitive offerings and reliable infrastructure.
The financial sector plans to launch new awareness campaigns targeting both consumers and merchants. These campaigns will highlight the convenience and security benefits of going cashless. Mastercard and other payment networks are investing in local partnerships to expand acceptance points.
For now, Panama sits at a crossroads. Consumer demand for digital payments is clear and growing. The infrastructure is mostly in place. The remaining hurdle is merchant adoption and the cultural shift away from cash. Industry leaders believe this transition will accelerate naturally as younger, tech-savvy consumers become the dominant economic force in the country.