The cross-border payments landscape in Latin America.
Accepting and sending cross-border payments in Latin America can be challenging for international merchants. Four of the world’s top 10 countries with the lowest bank account adoption are in Latin America and there is a lack of payments standardization across the continent (Global Finance). Additionally, complex cross-border payments infrastructure, different regulations and diverse local payment preferences, including a preference for using cash to pay for digital transactions, are hurdles merchants must be aware of across Latin America’s payment landscape.
Yet, ecommerce’s share of total retail spend in Latin America grew more in the middle of 2020 than in the last three years combined — making it a region with significant revenue potential (AMI).
Accepting Cross-Border Payments in Latin America
Merchants need to understand the local payment preferences in each market and the platforms that work for them. While credit cards are used in different Latin American countries, it’s not enough to rely on the same card payment options you provide to shoppers in the United States or Europe. International merchants selling to consumers across Latin America should also understand the region has:
- Rising digital wallet use and demand for other alternative payment methods.
- Local credit and debit cards that may not permit international purchases.
- High reliance on cash payments for digital transactions.
How to Offer Better Cross-Border Payment Options in Latin America
International merchants researching a robust solution to cross-border payments in Latin America should look for partners that can deliver:
- Accept customers’ preferred local payments, including cards, bank transfers, ewallets and cash
- Accept payments in multiple currencies
- Cost-effective foreign exchange and single currency settlement
- Effective fraud protection across countries and payment methods — not just cards
The Top Payment Methods in Latin American Countries
A good cross-border payment system must accept the payment methods relied on in Latin American countries, allowing consumers to make and receive payments with locally preferred payment methods. Here are examples of the most popular payment methods in Latin America’s three largest eCommerce markets.
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Accepting Cross-Border Payments in Argentina
- 40% of online purchases are paid for in cash here, so it’s an important payment method to consider.
- Visa and MasterCard are commonly used.
Accepting Cross-Border Payments in Brazil
- Boleto Bancário vouchers are a popular option that lets people pay for digital transactions with cash at convenience stores or ATMs.
- Only 27% of Brazilians own credit cards and bank transfers are key to online payments.
- Local cards Elo and Hipercard are preferred and global cards only make up a fifth of transactions.
Accepting Cross-Border Payments in Mexico
- Only 37% of the population has a bank account and when shoppers buy online they often use a QR code to pay in cash at a local store.
- About 17 percent of online transactions in Mexico are paid for with a bank transfer.
Navigate Cross-Border Payments in Latin America with Confidence
Consumers in Latin America have developed payment preferences across a wide array of available methods. Whether you’re accepting cash or voucher payments such as Brazil’s Boleto Bancário or ewallets and cards, a localized payment strategy is essential for cross-border sales success in this diverse payment landscape.
“Global Finance.” https://www.gfmag.com/global-data/economic-data/worlds-most-unbanked-countries.
Photo: Jezael Melgoza on Unsplash