Part 4 of the global payment methods guide created by Adyen to help businesses expand globally.
LATAM is one of the top regions in the world for growth. So building out your operations now will put you in a good position to grab market share. LATAM is economically dominated by Brazil and Mexico.
Critical to success across LATAM is localization of both marketing and payment methods, which will improve both authorization rates and customer experience.
Brazil is the largest online market in Latin America, representing over 40% of the region’s ecommerce sales. In 2015 online retail sales reached $19 billion and Bain and Company expects the Brazilian ecommerce market to maintain a healthy annual growth of 11% right up until 2019.
Internet penetration has been growing steadily in recent years. 66% of the population is now online, up 5% from 2015, and Brazil has an average of almost two devices per person.
There are more than 200 million active cards issued in Brazil, with credit cards representing around 45% of the total. It's important to mention that debit cards have quite a low penetration in online sales in Brazil as 3D Secure is mandated for this type of transactions.
Adyen is pioneering in the market by processing debit cards without 3D Secure for selected businesses previously approved by the Schemes and the Issuers. It's also important to note that many of these cards are not enabled for cross-border payments (even though they're Visa or Mastercard branded). Boleto Bancário, a cash-based payment method, is also popular, especially with customers who do not have a bank account. Finally, another important thing to know is that up to 80% all commerce payments are made in installments.
To offer payments in installments, you must be connected to local Brazilian acquirers. Many Brazilian cards are limited to domestic transactions only, which also require a connection to a local acquirer. Adyen has been acting as an acquirer in Brazil for Visa and Mastercard since 2016 and is adding American Express and ELO soon, delivering a solution with the same service levels and functionalities made available in other markets.
Over the recent years, Mexico has attracted increased interest from global brands looking to expand in a country where online shopping is growing at an exponential rate. The country’s online retail revenues are forecasted to grow to US $6.7 billion in 2019, with online buyers increasing from 10.1 million to 21.1 million.
In terms of mobile, a recent study shows that Mexico is one of 22 countries leading the trend toward mobile commerce, and young adults made 88% of smartphone purchases. The country has one of the largest mobile markets in Latin America, with one-third of all residents using smartphones.
Installments (for cards) are also popular, and a local entity is required to support this type of payment.
In Mexico, many domestic cards are not enabled for cross-border purchases and use of a local acquirer is recommended to increase authorization rates. Adyen has local acquiring capabilities in Mexico, so you can process transactions with credit and debit cards issued by any bank.
Take a look through each part of the global payment method guide to learn the local payment language.