THE PAYMENT
PERFORMANCE
CHECKLIST TO
ELEVATING
YOUR LATAM
REVENUE
How global brands can fuel their
LatAm reach by diving deeper
into their payment performance
strategy & partners.
GUIDE: THE PAYMENT
PERFORMANCE
CHECKLIST TO ELEVATING
YOUR LATAM REVENUE
How global brands can fuel their LatAm reach by diving deeper
into their payment performance strategy & partners.
You’ve leaped into the Latin American market.
Recognizing the power of this USD 378 Billion
market and making a move to unlock your
products and services in the region is only the
first step.
The real challenge begins: how to scale your
customer base, reach sales goals and build
brand equity in the region.
With the depth and diversity of consumer
payment preferences, most brands know the
value of adopting a comprehensive payment
strategy for Latin America.
However – this is where many miss the mark.
A truly localized payment strategy should
never be static. It works best when it is
evolving to maximize performance. And yet,
many payment strategies focus on only a few
methods or holistic partners that aren’t looking
at the performance through a localized lens.
What should you be looking at to ensure you get the most
from your existing payment strategy and partner?
We’ve mapped out the checklist to maximize your potential in the Latin American market. Check it out:
DEPTH & PAYMENT LOCALIZED
QUALITY OF OPTIMIZATION STRATEGIES
COVERAGE
BUSINESS.EBANX.COM
DEPTH & QUALITY
OF COVERAGE
Capturing every payment opportunity that comes your way.
Year after year, the payment landscape is unwinding, and Latin America is no exception. The digitalization
pace has been rapidly climbing and directly affecting how customers look to pay for their online purchases.
When brands start to operate in LatAm, it’s common to make the mistake of only offering international
credit cards for Latin American customers or focusing on just local credit and debit card schemes.
The secret lies in investing in the local payment methods that are the most widely adopted, which in
LatAm includes a variety of localized alternative payment methods and cash.
HOW LATIN AMERICAN CONSUMERS PREFER TO PAY:
Credit cards represent over half of the volume, but alternative payments’ share is growing.
Payment Type Volume (USD bn) Annual growth
Domestic credit cards $95.4 44%
1%
International credit cards $68.9 30% 7%
Debit cards $38.6 32% 9%
33%
Digital wallets $33.4 40% E-commerce
11% share
Cash-based $26.9 11%
Bank transfers* $19.1 107% 13%
24%
Other $8.5 17%
* including Pix and other instant payment methods.
Let's get deeper into the payment methods that draw consumer payment preferences in Latin America.
Local cards are the most used
payment method in LatAm
Across Latin America, credit isn't nearly as popular as it is
in other countries. Instead, local credit and debit cards
are proper methods that are an essential payment
method to make available when growing in LatAm.
ONLY 19% of Latin Americans
own credit cards
JUST 6% Have cards enabled for
international transactions
of Latin Americans are
70% connected to the internet
DEPTH & QUALITY OF COVERAGE
PIX, the revolutionary
Exponential growth
Brazilian instant Pix volumes already outpaced cards and boleto in Brazil.
payment system
PIX has taken the market by storm when looking at
Brazil, with 40% of Brazilians using PIX to pay for
online purchases. It’s the perfect example of a rapid
payment preference shift that brands must stay on
top of. Global merchants who adopt this payment
method will be on the cutting edge.
Extra reading: PIX is ‘much cheaper’ for
merchants than credit and debit cards;
economists from BIS and Brazil's Central
Bank point out.
Alternative Payment Methods
and the phenomenon of becoming digital
43% 41% 38% 31%
APMs are any payment method beyond cards. In
Latin America, these payment methods are
strategic for companies who want to seize the Argentina Colombia Peru Brazil
region’s full potential. Currently, APMs represent
30% of Latin America’s e-commerce volume.
In Latin America, digital wallets, bank transfers,
and cash-based payment methods (such as OXXO 30% 18% 18% 16%
and other vouchers) are the most popular APMs.
Bank transfers were the fastest-growing APM in
LatAm in 2021, with a 107% year-over-year growth. Mexico Chile Uruguay Ecuador
“APMs bring an opportunity to digitize
and include consumers without APM volumes on LATAM
necessarily relying on a banking e-commerce 2021
relationship. In many countries in
Latin America, they are easier and
Digital Wallets $33bn
faster than a banking option.” 40%
André Carréra
Director of Product Management at EBANX Cash-based $27bn 12%
Bank Transfers $19bn 107%
From Nequi in Colombia to OXXO in Mexico,
passing through Mach in Chile, to Mercado Pago
in Argentina, APMs have the most diversity, and Others $9bn 17%
there is no one-size-fits-all market.
DEPTH & QUALITY OF COVERAGE
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WHAT ABOUT CASH?
Latin America has long been a cash-first
region. Over time it has evolved to digitize
these means. However, global merchants still
IS IT STILL KING?
must not overlook cash. Despite the rapid
growth of digital payments, cash-based
methods will not be abandoned any time soon.
Boleto Bancário: Brazil's OXXO the national Paying in cash
most popular cash- preference in Mexico remains king even in
based payment method Around 71 million Mexicans do e-commerce because
The most famous Latin not hold a bank account, and of many cultural
American cash-based OXXO allows merchants to tap preferences
payment method is probably into this substantial group of
‣ Argentina: PagoFacil,
Brazil's Boleto Bancário. For online buyers. With more than
Rapipago, and Cobro Express
global brands, offering Boleto 16,000 stores across the
Bancário provides an efficient country, consumers can pay for ‣ Colombia: Via Baloto
means to reach the 65% of their online purchases in cash, and Efecty
Brazilians who do not own a and merchants have a zero
‣ Chile: Multicaja and
credit card. chance of chargebacks.
Sencilito
CASH-BASED PAYMENT REPRESENT AROUND
20% OF TOTAL E-COMMERCE VOLUME
CENTRAL AMERICA: Exponential growth 2021
THE NEXT SWEET SPOT Guatemala 60%
With an online market in its infancy, and a young
and digital-savvy population eager to buy online, El Salvador 50%
Central America has some of the highest growth
rates in Latin America’s e-commerce – and should 40%
Panama
be the next big thing in the region.
Dominican
While LatAm expanded 37% in e-commerce in 26%
Republic
2021, some Central American countries outpaced
this mark, reaching 50% growth. The region has Costa Rica 26%
the perfect foundation for the exponential growth
of e-commerce: LatAm 37%
✓ High connectivity and digitization, primarily via
mobile;
✓ A young population, the average age of 25
years, eager to consume digital products;
Takeaways
✓ An Early-stage market with few digital payment
options online stores. ✓ International cards aren’t enough to
reach all Latino consumers;
With local payment methods, SHEIN ✓ Zone into each market’s unique payment
has reached 65% coverage in Mexico. methods;
Debit cards, and OXXO are essential payment ✓ Don’t overlook up-and-coming markets;
methods for global companies in Mexico. By
accepting local payments, merchants can ✓ Stay on top of evolving consumer
increase their consumer base and achieve great payment preferences.
results in the region.
DEPTH & QUALITY OF COVERAGE
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PAYMENT
OPTIMIZATION
The payment metrics that matter.
The payment is the moment of truth in the Optimizing your payment performance on an ongoing
consumer relationship when customer acquisition basis ensures that you have the right resources, from
costs convert into revenue. In this context, funneling transactions to the right providers and
approval rates can be a significant challenge for acquirers to building a genuinely localized strategy for
many global brands in Latin America when working each market and a seamless payment experience for
with international acquirers solely. consumers.
The value of adding a local payment JUL/21 DEC/21 IMPROV
provider to your payment stack
Approval Rate by Order 45% 73% 28%
A merchant that chooses to include a Latin
American Processor for its payment strategy saw
Conversion Rate by Order 63% 79% 16%
its performance upsurge noticeably, bringing
higher approval rates and more transactions per
Trx count (k) / Month 1.2M 3.9M 2.7M
month. Take a look:
How to optimize and scale your payment performance in each LatAm market
Several factors can impact the number of approved transactions, including accepted payments, restrictions
within the existing infrastructure, network delays, timeouts, and others. When it comes to all the payment
methods you offer your consumer, one size doesn't always fit, so let's uncover the essential components
Have the right local acquirer network for your customer base
Being connected to multiple acquirers is paramount to optimizing approval rates. Every consumer base is
different, so having a local partner will support you in tailoring consumer payment behavior to the nuances of
each acquiring partner.
Local Acquiring International Acquiring
International and domestic card schemes International schemes only
Best performance in payments with a direct Worse performance in payments (since the issuing
connection to banks and local acquirers. banks tend to refuse more transactions from
Companies can reach the Total Available international acquirers than local acquirers). More
Market by offering all local payment methods limited access to the Total Available Market
Approval rates for a merchant using
The merchant can have an approval rate
only international acquirers can
in the range of 70% to 90%
range from 30% to 50%.
Interchange fee International acquirer
Transaction fee FX fee International service assessment +
scheme standard assessment
Secure transactions with Lack of regionalized
regionalized risk management transaction security
PAY M E N T O P T I M I Z AT I O N
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Smart Routing – access all the acquiring banks through a global network
Every transaction in the payment process counts. Yet, retry logic can effortlessly and automatically
Smart routing employs the principle of efficiency recover certain failed transactions to increase the
by sending every transaction to the acquiring bank, merchant's transaction success rate and keep
where it is most likely to be settled quickly and customers on track for future payments.
successfully.
Even when the first bank declines the transaction,
There are countless reasons why a payment is not this intelligent solution submits the transaction to
approved. Unfortunately, the reality is that another bank that is also likely to approve it.
whenever a customer's payment is not approved,
you run the risk of a lost sale and, ultimately, a Meet the power of start routing and retry logic
lost-loyal customer.
EXAMPLE
Success
Success Transaction 5 10% saved
Intent to Signup &
purchase Validation
Failed 10% failed
Smart Retry
Chargeback Prevention – communication is the most potent tool to mitigate it
Imagine a client authentically subscribed to your Communication can be a solid ally in reducing
service. However, the price, including taxes, wasn't chargeback rates, and the golden rule here is
transparency.
clear, and the user didn't recognize the charge
properly. So, this client decides to go back to your ✓ Don't hide taxes, but let it clear to the customer
website and revoke it or find a customer service the total amount they will need to pay;
that could support the issue, but the cancellation ✓ Offer a straightforward cancellation process;
process isn't transparent either. Guess what will be ✓ Always communicate price changes to your
the easiest solution? Request a chargeback. customers.
THE CHARGEBACK Q&A Q. What percentage of chargebacks are
Q. How to calculate the Chargeback rate? “friendly fraud?" ?
# of chargebacks A. Friendly fraud means that the customer files
current month a chargeback rather than return an item. They
= Chargeback Rate are lazy, not malicious. The percentage can
change depending on the industry.
# of transactions
current month
PAY M E N T O P T I M I Z AT I O N
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Q. Can a Chargeback be reversed? Q. Is there chargeback insurance?
A. Anything is possible. Communicating with A. Yes. Many companies now offer this, and it
the buyer is the best thing a merchant can do protects against fraudulent credit cards, faked
to reverse a chargeback. They should also have shipping information, forged signatures, and
all records and act promptly to get ahead of the more. Merchants can be reimbursed for the lost
situation. The chargeback can't be canceled product and maybe more.
but can be changed, and the merchant can
recover the money.
Q. How do Chargeback Disputes work?
The consumer The merchant To dispute it, The bank along If the
contests a or the payment all the with the credit disputes is
transaction processor evidence is card schemes won the
and the bank receives the collected and have 140 days money
issues a chargeback sent to the to decide who returns to the
chargeback. and it can be bank. wins the merchant.
accepted or dispute.
disputed.
Performance of card transactions
from a merchant with a subscription
model in Brazil
‣ 87% Approval rate at a unique user level
‣ 68% Approval rate in transactions due to
updates on lost or expired cards (from August
to December 2021
‣ 133,716 Approved transactions by Retry
Logic (from August to December 2021
Takeaways
✓ Access and flexibility to use a diverse
acquirer network are key;
✓ Approval rates are a fundamental
indicator of your performance health;
✓ Constantly optimize performance with
smart routing;
✓ Reduce chargeback rates.
PAY M E N T O P T I M I Z AT I O N
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LOCALIZATION
Driving growth by delivering a localized experience.
You might have everything ready in terms of a
platform to sell online in Latin America. But, if you
overlook understanding the local market and its LATAM payments ecosystems
culture, the results might not reach your expectations. are often rooted in legacy
systems and outdated
How to build a localized strategy processes.
for a winning operation in LatAm
A tailored payment partner will
Providing access to Latin American shoppers by
offering distinct payment methods is paramount! unravel the region's complexity,
Sadly, that alone isn't enough for a business to guaranteeing accuracy and
thrive in the region. To sell globally, you need to
think locally. It means adjusting your strategy to
reliability to its merchants.
each audience's needs and expectations.
Use available local resources in your favor
Selling to another region always requires some
research and consideration of brand expectations.
Adapting how you promote your products and
services and placing your brand according to the
regional characteristics is localization – an essential
part of bringing your payments strategy full circle.
The localization applied to your
business strategy: selling the right
product on the right date.
What is the date of the most significant sales in Latin
America? If you answer that Black Friday is the only
option, sorry, but it's not true! Black Friday is an
important date, but El Buen Fín is even more
prominent in Mexico, and Cyber Days have a sweet
spot in Chile.
For your brand to reach its full sales potential, the
key is to advertise and sell at the right time. Make
sure your sales and marketing teams set their
strategies accordingly.
Black Friday Cyber Monday El Buen Fin Double 11
All Latin American
All Latin American All Latin American countries, with
Where Mexico.
countries. countries. highlights to Brazil
and Mexico.
Date in Friday, Monday, November
November 11
2022 November 25. November 28. 18 21
L O C A L I Z AT I O N
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Find trusted local payment partners ARGENTINA CHILE
Global companies expanding to Latin America face
similar challenges. No matter the business vertical,
they all have to understand each country's
preferences, needs, and consumption patterns
BOLÍVIA COLOMBIA
before making any critical decisions.
Finding new channels to reach and activate this
audience is an essential piece of the puzzle.
We tend to identify some key factors when winning BRAZIL MEXICO
LatAm in this process. One of them is: To partner
with influential local payment organizations.
Teaming up with a Latin American Payment
Provider enables merchants to reach a collection of
regionalized partners, sustaining growth in the
region through a varied array of activation
strategies.
PERU
It will allow global brands to expand brand reach
AND MANY OTHERS!
and localize their marketing and sales strategies in
different countries.
Localize your communication and support
When doing business in Latin America, understanding IN BRAZIL, ONLY 5% OF THE
the consumers and communicating with them can be POPULATION SPEAKS ENGLISH.
a challenge for international brands.
A large part of the population only speaks Spanish or Customer support is the backbone of your business.
Portuguese. Therefore their fear when shopping Providing the most personalized customer support
online from international websites increases once experience can only bode well in customer retention
they are afraid of not being able to contact the and consequential loyalty.
merchant after the purchase.
Uber's winning strategy in LatAm: Quick wins for getting closer
the path to profit is localization. to the Latin community:
The brand has been paving the way and setting ‣ Translate FAQs and other helpful
the standard for what it means to have a local documentation into the local
presence in LatAm. Easy peasy? Not at all. languages;
These were some of the barriers Uber had to ‣ Build a diverse customer support
overcome to grow locally:
team who speak Spanish or
‣ Compliance with each country's laws and Portuguese;
regulations;
‣ Support your customers in their time
‣ Unlocking local payment methods; zone in multiple channels.
‣ Activating a marketplace model;
● Identifying cultural differences, and meeting local expectations.
Click here to know how it all unraveled
Takeaways
✓ Invest in the correct local resources;
✓ Look to payment partners to connect
with new audiences;
✓ Have localized support to support
your customers.
L O C A L I Z AT I O N
WRAPPING UP THE
COMPLETE CHECKLIST
Here are all the essential ingredients for your progress in LatAm:
The Payment The Performance The Performance
Checklist Checklist Checklist
✓ International cards aren’t ✓ Access and flexibility to ✓ Invest in the correct local
enough to reach all Latino use a diverse acquirer resources
consumers network are key ✓ Look to payment partners
✓ Zone into each market’s ✓ Approval rates are a to connect with new
unique payment methods fundamental indicator of audiences
✓ Don’t overlook up, and your performance health ✓ Have localized support to
coming markets ✓ Constantly optimize support your customers
✓ Stay on top of evolving performance with smart
consumer payment routing
preferences ✓ Reduce chargeback rates
THE EBANX DIFFERENCE 1
Depth of Coverage: Optimize revenue
with a solution that unifies the different
local payment methods in LatAm;
Latin America is a key market when it comes to global
commerce. The key to unlocking it lies in making your
product available to each country’s customers. Payments performance: Uplift your approval
2 and authorization rates with local acquiring;
EBANX connects global technology companies
ranging from gaming, streaming, SaaS, marketplaces,
eCommerce, and more with the payment platform to Localization: Understand cultural
propel their growth in the region. Grow exponentially preferences, build brand awareness, stay
3 ahead of each country's regulatory aspects,
and increase revenue in up to 15 countries in Latin and connect with local payment partners;
America with the finest experts
Have all strategic details in one dashboard, with
Platform flexibility: No need to overhaul
local payment methods, top-notch experience, and your existing partner. EBANX simply plugs
the flexibility that best fits your business needs, 4 into you where needed, whether via API
or through a channel partner.
goals, and more:
The value is clear. Brands like
and more have expanded their reach significantly since working with EBANX.
BUSINESS.EBANX.COM
.
READY TO TAKE YOUR
COMPANY TO THE
NEXT LEVEL IN LATAM?
Learn more
Get in touch
The brand “EBANX” represents a group of several products and companies in Brazil and other countries. Some of these
products may only be available for speci c industries or countries, contact EBANX team to get further information.
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