South America region carries a clearly deserved belief of being rather perspective e-commerce market. Recently, Latin America is experiencing a B2C gaining pace. In these conditions online payment environment gets more dynamic and, thus, payment methods tend to be diverse.
Despite, credit cards maintain their leading position, alternative methods are also of increasing demand here. Intensive usage covers such options as cash on delivery, PayPal and local banking schemes.
The distinguishing feature of the region is the frequent cases of shopping carts abandonment in such places as Peru, Mexico, Argentina and Colombia. Another difference lays in more trust to local and regional online payment web-sites methods, due to security risks fear and unbanked culture of numerous customers. For example, the well-known option here is DineroMail and MercadoPago.
Besides all this, regional authorities try to boost the economy by encouraging payment competition. Thus, the entry to the South America market is quite easy.
Due to the relatively recent commencement of e-commerce development in South America, the online payment adoption is quite patchy. There still remains a significant obstacle in form of high taxes and delivery tariffs.
Unbanked culture in South America is a common case. A lot of people prefer to pay cash, owing just their traditional position or a location, far away from banks. This audience is an attractive niche for financial companies to provide it with various payment methods, close to usual for it. In such situations different variants of transaction commitment are launched: vouchers, micro-finance, mobile payments, rechargeable cards connected with mobile devices, prepaid cards and others.
Mobile payment usage is growing here constantly, mostly, in result of mobile shopping and smartphone penetration increase. The most rising amount of those, who choose mobile applications to pay through, is noticed in Argentina, Brazil and Mexico.
Above all, the diversity of payment methods forces to name some more alternatives, such as pre-paid cards and e-Wallets, like DineroMail. These two act as credit cards or bank transfers and are of great spread as well.
Brazil. The South America most advanced country in terms of e-commerce
Significant growth is highly expected in Brazil in terms of e-commerce. In this industry transfers are mostly carried out by credit cards, which are not supposed to be used within cross-border trade.
In fact, country is famous for setting fairly low credit card limits. For this reason many customers implement hire-purchase system of payment. Alternatively, Boleto Bancario is used. Basically, it represents a financial document or invoice, that is used by bank. This method is akin to wire transfers or cash payments. According to the Boleto Bancario, consumer is able to pay the cost with cash through post, terminals, ATMs, banking representatives and other methods within the country boundaries.
In a nutshell, if deciding to enter the Brazilian market the Boleto Bancario is a must. This method is known to be safe and reliable.
Concerning DineroMail, it is considered to be the second popularity in Mexico, along with credit cards and cash-based methods. Customers, having an associated e-mail account, often go to this offline payment system. With its help, consumers may commit cash payments to the store or to pay upon delivery. As an alternative, people also use bank transfers and PayPal.
Chilean payment methods
Generally, in Chile credit cards option is widely spread. Besides, there is a local payment method – Servipag. To point, all credit and debit card companies are required to be conducted through the affiliate, which is jointly run by local banks. Moreover, funds repatriation taxes have recently been risen. So, merchants, aimed at international trade, have to consider these changes.
Some words about Argentina payment landscape
Besides all options, described above, in Argentina two more methods could be met. These are Rapipago, which supports offline payments through credit cards, checks and cash, and PagoFacil, provides both online and offline payments. The most popular payment methods among Argentines concern prepaid cards, owing their reliable security, and mobile payments via SMS.
To take into account, to commit cross-border transfers a local entity has to conduct payments in Argentina and, in case of funds repatriation, to follow certain fiscal limitations.
Sistema de Dinero Electronico. Ecuador
Ecuador claims to be the first country to launch its own governmental digital payment system, so-called Sistema de Dinero Electronico. Electronic option was implemented with the aim of lifting the dollar-based fiscal system, by which the national one was replaced. Run by the state, this electronic option turns out to be more reliable and steady.
Even with multiple unbanked population Sistema de Dinero Electronico is of great usefulness in Ecuador. In order to draw an analogy, it can be compared to M-Pesa system.
The electronic commerce industry adoption has just begun to accelerate, but it has already significantly succeeded in its development. Very soon online business will cover all the deepest corners of South America.