10 reasons why international merchants should offer better payment options to LATAM customers
Why Latin America? LATAM is a region full of potential opportunities for those who know where to find them. With 20 countries and around 600 million people, there is an opportunity for your business.
Latin America has a lot of economic growth over the past 10 years. Whether you sell food or even luxury goods there’s lots of opportunity in Latin America. It is also known as a region for large volume exporting.
Taking a closer look specifically at the payment sector in LATAM, those residing in Latin America use different alternative payment methods (APMs) to purchase goods and services. These payment methods include using local credit cards, bank transfers, cash vouchers, the option to pay in instalments and paying via mobile wallets such as Apple Pay. Apple Pay has only recently become available to those in Mexico.
The impact of the Coronavirus pandemic has had an impact on LATAM and it has accelerated many trends in the payments sector. The number of APMs available to Latin American consumers is on the rise. Online card payments in Chile doubled in March 2020 in comparison to March 2019. More people are buying online from businesses across borders.
Paying in instalments is a popular payment option in LATAM. According to statistics, about 60% of ecommerce is currently transacted via this method. If we take a closer look at Brazil, they have an ecommerce installment rate as high as 80%.
Merchants doing business in Latin America should consider supporting the needs of consumers here.This could be by providing online instalment payment options to match local expectations or by providing them with ways to pay securely on their smart devices regardless of whether they have a bank account or not. Businesses can apture a segment of the market if they provide the ideal payment solutions.
Below we have highlighted the main reasons why international merchants should offer better payment options to LATAM customers:
- The Smartphone Opportunity -There is an increased use of smart phones in LATAM and this has resulted in an increased use of purchasing goods via mobile devices. This trend is increasing so providing secure mobile payment options taps into this market
- Remove limitations - Not everyone in LATAM has a bank account. Your target market may wish to buy your products or services who may not currently hold a bank account, so if you offer a payment option for them this will gain new customers
- Awareness - It will gain your business more awareness. By offering ideal payment options you are showing your target market that you are catering for consumers needs and care about what they want. You can also do a marketing/advertising campaign on the APM you are now providing for greater exposure
- Sell more - You will be able to increase your sales. More payment options will likely gain more customers who prefer secure digital payment methods
- Increase market share - If you provide better payments options, you’re likely to gain more customers and increase your market share
- Improve your brand – As you accept payments from customers in LATAM you are gaining potential brand advocates for your business. If they have a positive experience, they are likely to spread the word online maybe via social media and this can lead to even more customers which again leads to more sales and revenue.
- Faster transactions – If you offer a good payment solution where you (the merchant) get the funds faster and the customer receives the items/service faster this is a win-win situation for you and the customer. We live in a society where we want things now and we don’t want to wait so fast transactions are crucial
- Security – An improved and secure payment option is more secure for the customer and more secure for the merchant. This reduces risk to both involved in the transaction.
- Cashflow - Faster payments is also likely to lead to a better business cash flow.
- Stay ahead - Don’t let the competition get ahead.
Payfuture is an expert in LATAM payments. Contact us today to find out how we can help you to make the most of this business opportunity.