The online global marketplace is growing rapidly with more and more countries exploring new ways of doing business via digital commerce. Latin America is one of the hottest regions to consider expanding your sales efforts into, as it’s a region ready to spend. With a customer base so keen to purchase, it’s vital to examine the benefits of offering multiple payment options to this eager market to ensure you make the sale and gain repeat customers.
The Online Commerce Landscape in LATAM
Consumer confidence is exceptionally strong in Latin America with 121 million people currently shopping online in the region, and an estimated 41 million new users who will join their ranks by 2021. In total, it’s expected that there will be 163 million ecommerce users by 2021, representing 54% of the entire population. These buyers spend, on average, $275 USD which is expected to increase to $330 USD by 2021.
The main product categories that buyers in this area spend on are fashion items which bring in over $10 billion USD. Electronics is the second product category, with almost $9 billion USD, followed by toys, hobbies, and DIY which accounts for over $6 billion USD in sales.
A Diverse Set of Payment Options
Payment methods in Latin America vary greatly across countries and many different currencies are used. Over 650 million people live in forty plus nations in the region, an important consideration for merchants who wish to enter this market. It’s advised to offer shoppers local payment methods of choice as well as to show prices for items in local currencies.
A whopping 65% of online shoppers in Latin America who were surveyed indicated that their preferred online payment method was to use a credit card, followed by 41% who chose a debit card, 36% who used payment wallets, and 35% who selected to pay via Cash on Delivery. For the most part, regardless of country, credit cards remain the desired payment method. Other options include bank transfers, cash vouchers, and a variety of alternative payment methods.
One option to evaluate is Mercado Pago, the largest secure payment platform used for online sales in LATAM. In 2016, 138.7 million transactions were processed using this payment method, a 73% increase over the previous year. The company has been expanding at breakneck speed and continually adding innovative new technologies to their offering, including the ability for shoppers to pay using their tablet or smartphone.
You can also look for local payment providers and include them in the payment options you offer to your customers. For example, in Chile, a popular choice for payment that you can leverage is Webpay, powered by Transbank, the consortium of the major Chilean banks. It allows online shoppers to pay with MasterCard, Visa, Red Compra, Magna, and Diners Club credit cards. Webpay has obtained mass adoption by merchants because it is one of the cheapest payment processing tools to install.
The Benefits Gained from Offering Multiple Payment Options
Providing multiple payment choices for your customers helps ensure you make the sale. Fifty percent of shoppers said they were apt to cancel their purchases if their preferred payment method is not available, and 40% advised they were more at ease purchasing from a merchant that offered a wide range of payment options over one that only provided one payment method. The potential for abandoned shopping carts due to limited online payment options should keep you up at night! Online commerce is a highly competitive environment, and if you’re not offering an excellent customer experience, including a wide variety of payment methods, then you risk customers taking their business elsewhere.
OSF Digital has developed several cartridges for Salesforce Commerce Cloud specifically designed to expand the payment methods you’re able to offer to your customers in the LATAM region. Integrator for Webpay extends Site Genesis’ existing functionality to assist you in configuring and enhancing your checkout process using Webpay’s payment gateway. Integrator for Mercado Pago will help you rapidly integrate Salesforce Commerce Cloud with Mercado Pago’s payment solution by enhancing Site Genesis’ existing capabilities. Adding both cartridges to your Salesforce platform will ensure your customers in Latin America can pay using their preferred method. This will help you retain sales and increase loyalty for your brand. Anything short of this and you may be losing out on revenue potential gained from participating in this booming ecommerce market.
