e-Commerce’s Most Promising Market? PayRetailers on Latin America
Latin America (LatAm) is an enticing and challenging markets for e-commerce merchants today. It is widely recognized as one of the fastest-growing markets in today’s world, but it is also widely misunderstood. Currently, roughly 60% of the continent’s population is unbanked. So how can LatAm’s e-commerce economy develop–or even flourish?
Finance Magnates sat down to speak with PayRetailer’s Igor Costa to learn more about how e-commerce companies can overcome the obstacles in Latin America in a webinar entitled “Exploring the Untapped Potential of the LatAm Landscape.”
The webinar explored the business opportunities available in LatAm, as well as challenges faced by retail users, SMEs, and larger corporate entities who are unfamiliar with local laws, connections, and regulatory framework.
The Unique Challenges of Integrating e-Commerce Platforms into LatAm Markets
PayRetailers positions itself in emerging local markets by offering a single API that e-commerce clients can use to integrate directly. “Our strength is that, with just one integration and one payment service agreement, you can cover the whole Latin American market,” Igor Costa explained. The company also offers a personalized service that guides clients throughout this process.
And having a local guide is essential–there are many factors that companies that don’t have experience in the Latin American market may not know about. For example, Igor explained that “many people in Latin America are not banked,” and therefore, “don’t have access to a credit or debit cards.”
Even if customers do have access to payment cards, “they may not be accepted internationally.” If customers manage to get a card that does work internationally, “there are high fees, and the exchange rate may also be pretty expensive.”
e-Commerce Merchants Must Work with “Local Payment Methods”
In other words, Latin American customers face many hurdles in the way of participating in the online economy. Therefore, merchants need to take extra measures to break into the market: “If you’re not offering a local alternative solution for consumers to buy something, these people will be left out of the e-commerce economy,” he said. “You as a merchant cannot reach those customers at this point.”
He illustrated with an example of how airlines operate in Latin America: “you can buy tickets at the airline offices. But if you live in the countryside, and not in the capital (where the offices are), you need to travel seven hours to buy airline tickets.”
Therefore, “having a good webshop is a must,” he said. However, in order to make the online economy function, merchants have to face an important challenge: they must work with “local payment methods.”
PayRetailers has addressed this problem by creating a way that individuals can pay for online products and services with cash. “Consumers can order something online through their mobile phone or computer and select one of several cash payment options,” Igor explained.
“We will then generate a QR code that the customer can take to one of our partners. We have agreements with supermarkets, pharmacies, banks, and other places” that customers can visit to pay for the goods and services they’ve purchased online.
LatAm Is Not a Monolith
PayRetailers has also developed a deep understanding of each local market within Latin America.
Unlike the European Union or the United States, Latin America does not have a unilateral currency. Additionally, each country has its own set of regulations, its own language, and its own culture. “All of these points are different from country to country,” Igor said.
“Looking at the Brazilian market, for example, they have a very particular regulatory framework,” he continued. “Setting up a local business can take a lot of time, and you need good advisors. If you don’t have the experience in the markets, it can be very difficult to send funds outside of the country.”
“And after setting up a business, you need to have the right local connections, and to be able to accept multiple payment options. You need to settle in a way that will cope with your cash flow needs. And that can be a huge challenge if you’re not familiar with local laws, connections, and regulatory framework. There are a lot of different factors at play.”
Listen to the full webinar here. Don’t forget to subscribe to Finance Magnates’ Youtube Channel for more content.
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