Your guide to capitalizing on the growing Latin American ecommerce market by offering local payment methods.
Accepting cross-border payments in Latin America means understanding the market, so merchants looking to trade in the region should ensure they approach it in the right way.
Latin America is a fast-growing ecommerce market. In fact, it was the region with the highest retail ecommerce sales growth in 2020, with a change of 36.7% compared to worldwide growth of 27.6% (eMarketer).
While bank account penetration is still relatively low, smartphone penetration is on the rise, and the in-person shopping limitations caused by COVID-19 have helped boost local consumers’ interest in online shopping.
What Are The Top Payment Methods in Latin America?
With an estimated 200 million unbanked individuals in the region, it’s important to understand local payment methods, offer other ways for your Latin American customers to pay and consider appropriate ways to build loyalty in your customer base. Brazil and Mexico continue to lead in ecommerce spending, with Brazil making up 32.5% of the market and Mexico accounting for 28.8%. (Statista) Other countries in the region are worth watching, however, as their local ecommerce markets develop.
Here are the preferred payment methods in Latin America, by country:
Argentina Payment Methods
Despite being the second-largest economy in Latin America, Argentina sits around the middle in terms of bank account penetration, with around half of the population having a bank account and only about a quarter using credit cards.
- Cash – Cash payment options like PagoFacil and RapiPago are the most popular online payment methods in Argentina.
- Credit cards – Next is credit card payments, with global brands Visa and MasterCard commonly used here.
- MercadoPago – Latin America’s leading online payment solution is popular in Argentina and many other Latin American countries.
Other popular online payment methods in Argentina include debit cards and ewallets.
Brazil Payment Methods
The opportunities for merchants in the Brazilian market can’t be ignored, but there are challenges in cross-border commerce thanks to the scale of the country, with technology and internet service inconsistent. Mobile commerce is an essential factor in the growth of the market, however, with 77% of rurally located Brazilians only using smartphones to access the internet. (JP Morgan)
- Credit cards – Both credit and debit cards appear in the top three preferred payment methods here. Local cards like Hipercard and Elo are more commonly used than international card brands.
- Cash – Cash by way of the Boleto Bancário is so common in Brazil that merchants looking to make cross-border sales here must offer it as a payment method.
- Debit cards – As with credit cards, local cards are used more often than international cards, so using a payment partner that understands payment processing in Latin America is key to success.
Other popular online payment methods in Brazil include ewallets and bank transfers.
Chile Payment Methods
Chile’s economy is a relatively stable one, and with 90% of the adult population having a mobile phone and 74% having a bank account, it’s a promising area for cross-border commerce (Rapyd)
- Local debit and credit cards – While international cards like Visa and Mastercard are used in Chile, local card providers such as Magna and Red Compra are very popular. Partnering with a local payment processor makes it easier for merchants to capture this market.
- eWallets – Both globally recognized ewallets like PayPal and local versions like ServiPag are popular online payment methods in Chile.
- Invoice/coupon payments – Despite having a comparatively high bank account penetration rate, paying cash via vouchers such as Sencillito and MultiCaja remain common here.