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.
We want to help bridge the gap between the two by offering some key points for insight and assistance:
* 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.
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* 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: 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