Tips for entering the Latin American market
Latin America is rated 5th in global e-commerce, behind North America, Asia Pacific, Western Europe and Eastern Europe. It accounts for 3.4% of total e-commerce volume and is trailed by the Middle East and Africa in 6th and 7th places respectively. The industry is growing and e-commerce sales are expected to surpass US$69 billion this year and to reach US$100 billion by 2014.
Within Latam, Mexico is the leading nation in e-commerce and Brazil follows, leaving many gaps in other countries where e-commerce rates are a lot lower. With the numbers and research available, it is clear that Latin America offers great opportunity for e-merchants but also presents several challenges.
* Understand the market: Martin Shrimpff, PayU Latam’s co-founder and business development director, told Payment Magnates that, “Less than 10% of Latin Americans have a credit card. The internet penetration is of about 50%. This means that if you do not offer alternative payment methods you will only be tapping a very small portion of your potential market in the region.”
* Accept local credit cards: Also suggested by Shrimpff who says that higher approval rates are more probable when local acquirers are used.
* Prove to consumers that online shopping is safe and make the experience pleasing for them: Latin American shoppers are still not confident with purchasing online which is why the publishing of security certificates may be a good idea. Also, be explicit about the payment process, explaining clearly your policies and procedures regarding warrantees and returns.
* Practicalities and logistics: Issues with currencies when you are in a new region and deliveries must be investigated and adapted. Make sure that you find out about postage (or alternatives if necessary).
* Mobile Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term: Given the widespread accessibility of smartphones and the growing mobile payment capabilities, you should consider how you might incorporate mobile into your payment options.
Image courtesy of Wiki Media
Latin America is rated 5th in global e-commerce, behind North America, Asia Pacific, Western Europe and Eastern Europe. It accounts for 3.4% of total e-commerce volume and is trailed by the Middle East and Africa in 6th and 7th places respectively. The industry is growing and e-commerce sales are expected to surpass US$69 billion this year and to reach US$100 billion by 2014.
Within Latam, Mexico is the leading nation in e-commerce and Brazil follows, leaving many gaps in other countries where e-commerce rates are a lot lower. With the numbers and research available, it is clear that Latin America offers great opportunity for e-merchants but also presents several challenges.
* Understand the market: Martin Shrimpff, PayU Latam’s co-founder and business development director, told Payment Magnates that, “Less than 10% of Latin Americans have a credit card. The internet penetration is of about 50%. This means that if you do not offer alternative payment methods you will only be tapping a very small portion of your potential market in the region.”
* Accept local credit cards: Also suggested by Shrimpff who says that higher approval rates are more probable when local acquirers are used.
* Prove to consumers that online shopping is safe and make the experience pleasing for them: Latin American shoppers are still not confident with purchasing online which is why the publishing of security certificates may be a good idea. Also, be explicit about the payment process, explaining clearly your policies and procedures regarding warrantees and returns.
* Practicalities and logistics: Issues with currencies when you are in a new region and deliveries must be investigated and adapted. Make sure that you find out about postage (or alternatives if necessary).
* Mobile Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term: Given the widespread accessibility of smartphones and the growing mobile payment capabilities, you should consider how you might incorporate mobile into your payment options.
Image courtesy of Wiki Media