Data is from an exclusive study, which shows that most merchants interviewed in this region agree that being able to offer local payment options is a game changer
SÃO PAULO, June 14, 2022 /PRNewswire/ -- BoaCompra by PagSeguro, a fintech company specialized in allowing worldwide companies to accept local payment methods and local currencies from 17 Latin American countries, has just released an exclusive study about the main current scenario of the online Latin American market. Entitled Digital renaissance in Latin America: a deep dive into trends, opportunities, and challenges in the Latin American e-commerce industry, the white paper was conducted in partnership with Americas Market Intelligence (AMI).
The comprehensive study provides insight and brings up-to-date data about the fast-changing online market in Latin America, a region with ripe opportunities for companies operating in the digital scenario — especially now, with the increasing penetration of digital banks, the region's digitization process being even more accelerated by the pandemic, and a recovering economy post-Covid. It focuses on the six leading markets in Latam: Brazil, Mexico, Chile, Colombia, Peru, and Argentina.
Besides internal AMI data and public sources, research also included in-depth interviews with cross-border merchants and local players selling in the above-mentioned markets in multiple industries, including retail, video and music streaming, gaming, travel, and B2B digital goods providers. The interviews took place in the first quarter of 2022.
A common point between all industries is the understanding that digitization is an ongoing trend that is here to stay. With an average of 77% both in internet penetration and in people who own a smartphone, shopping and doing several other daily personal and professional activities online is the preference of an increasing number of Latin Americans.
In this context, businesses of any sector are finding Latam a great choice for international expansion. Industries such as retail and digital goods saw an exponential rise in sales during the pandemic: the white paper shows that 61% of the population in the evaluated countries made online purchases in 2020 and, in 2021, the number rose to 67%. With more frequency, more product variety, and a higher average ticket, AMI expects Latin America's e-commerce market to grow at a CAGR of 25%, reaching US$ 646 billion in 2025.
To tap into all this market potential, attending client expectations is fundamental — when it comes to offshore merchants selling in Latin America, this includes their need to accept local payments and local currencies.
According to the study, while credit cards are still the most used payment method in Latin America (46% of sales in 2021), 78% of the cards used in the region are domestic-only. In Brazil, the rate of domestic-only credit card payments reaches 70%. Almost all merchants interviewed during research agree that being able to offer local card payment options is a game-changer, since it increases approval rates, improves client experience, and allows merchants to provide local practices such as installment payments (which represent 50% of online sales paid by credit cards, depending on the segment and purchase size).
Another major trend in Latin America is the increasing preference for mobile banking and digital payment methods, such as Brazil's Pix (electronic and instant payment method offered by the Brazilian Central Bank). This pushes forward financial inclusion and innovation in the region, changing the traditional payment landscape considerably and making it even more interesting for foreign companies to sell there.
Navigating this complex financial scenario makes operating in Latam difficult for foreign companies without a local entity, which highlights the need for counting on a local partner with expertise on the region's financial landscape. Thus, relevant data and possible solutions for merchants operating or planning to operate in Latam are available in the full white paper, which can be downloaded for free through this link: https://hubs.la/Q01csnZv0.
About BoaCompra by PagSeguro
BoaCompra by PagSeguro is a local payments platform that enables worldwide merchants accept local payments in Latam or send payouts to Brazil. An one-stop payment solution that offers local processing in local currency with local or international settlement in 17 Latam countries, it's part of PagBank PagSeguro, one of the biggest fintech companies in Latam and a disruptive provider of financial technology solutions driven by robust infrastructure.
About Americas Market Intelligence
Americas Market Intelligence (AMI) is the premier market intelligence firm for Latin America, providing powerful market and competitive intelligence-driven insights for companies to succeed in the region with a focus on financial scenarios, payment methods, and financial innovative solutions.