When businesses seek fast-growing markets, they often think of Asia. But Latin America is a compelling choice for businesses with the know-how to meet local consumer payment preferences.
Economic volatility and political unrest in countries, like Venezuela, tend to dominate the news, but businesses who look beyond these headlines will find markets experiencing significant ecommerce growth. Brazil (#2), Mexico (#6) and Argentina (#8) are all in the top-10 global markets for total hours spent on the internet. In 2019, Mexico experienced 35% ecommerce sales growth, the fastest of any country. While Columbia and Argentina were both among the fastest-growing ecommerce markets in the world. To seize this opportunity, businesses need to think globally while understanding consumers locally.
Here are Rapyd’s five must-know tips for ecommerce success in Latin America
1. Think outside the card
Credit cards and debit cards aren’t the only solutions or even the most popular ones. 65% of adults in Latin America don’t have a credit card, debit card or bank account, and many of the credit cards that are in use are only authorized for local purchases. To reach consumers across Latin America, it’s important to consider other payment options, including mobile payments, ewallets and regional payment solutions.
2. Understand the voucher system for online cash payments
There are many regional payment solutions throughout Latin America, but the voucher system stands out. A shopper receives an invoice when they make a purchase online. The shopper then prints out that invoice and takes it to a local network agent, such as a convenience store, where they pay in cash. The network confirms the payment with the merchant so they can deliver the goods. Around 20% of total ecommerce purchases in Latin America are paid in cash using a coupon/invoice network, such as Boleto in Brazil and Oxxo in Mexico.
3. Offer installments
Another payment option that’s important to understand in Latin America is the wide-spread use of Installments. They are particularly popular in Brazil, Mexico, Argentina, Chile, and Columbia. Approximately 50% of all ecommerce in Brazil is done via installments, and they enable consumers to make discretionary purchases for things like jewelry, electronics and travel, that they otherwise couldn’t afford.
Installments are authorized and captured for the full amount upon purchase, and the balance is settled over a period of time, with each installment automatically debited every month. Customers pay an up-front fee instead of being charged interest. Sometimes this fee is rolled into the purchase price and consumers are given a “discount” for paying in full.
4. Localize your site content
An individual’s online buying behavior will be affected by their access to mobile and internet technology, banking, and cultural factors. Create an intuitive experience that takes into account their preferences and is authentic to their culture. You should use local languages and currencies on your site. 75% of consumers prefer to buy products in their native language, and 60% rarely or never buy from English-only websites. Displaying prices in local currencies is even more important. More than 92% of consumers prefer shopping on ecommerce platforms that display prices in their local currency.
Another key consideration is load time. Internet and mobile data speeds are inconsistent across Latin America. Companies can significantly improve online conversion rates by creating sites that are optimized for mobile commerce and that load quickly without heavy bandwidth requirements. 57% of customers will leave a site if they have to wait 3 seconds or more for a page to load.
5. Localize your payment options
It is critical to determine the right payment options for each country, and businesses should be prepared to adjust to local preferences. Additionally, regulatory changes, evolving consumer behavior and the growth of Latin America’s mobile economy require businesses to be flexible and ready to adapt. That’s why you need a payment solution, like Rapyd Collect, that can support all the ways consumers in Latin America like to pay. With Rapyd, you can quickly optimize carts, apps and checkout experiences everywhere you do business.
Want an in-depth breakdown of country-by-country payment preferences in Latin America? Download our LATAM Country Profile Book
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Rapyd does for fintech what the cloud did for IT. We connect businesses to all the ways the world likes to pay, powering frictionless global commerce that creates new opportunities for businesses and people.