Latin American e-commerce is developing rapidly, with local payment methods helping

Latin America saw the largest e-commerce growth in the world in 2020 , ranking first ahead of the Asia-Pacific region . The development of e-commerce relies on online payments, and local payments and customized local payment methods have boosted Latin American economic growth.

The best news for the Latin American economy during the pandemic is the rapid development of e-commerce. According to data from eMarketer Insider Intelligence , Latin America saw the largest e-commerce growth in the world in 2020, ahead of the Asia-Pacific region and ranking first in the world . The increase and customization of local payment methods for e-commerce in Latin America has accelerated its economic growth.

To understand how local payment methods contribute to the Latin American economy, it is necessary to understand the dynamic payment situation in Latin America.

The main payment methods throughout Latin America are cash and local credit cards , which account for 58% of all online transactions in Latin America . These cards, such as Elo or Hipercard, and even locally issued MasterCard and Visa cards, are tied to local and regional financial networks and cannot be used to make payments on international websites or outside of their home country.

Other local payment methods are built around installment payments. In Latin America, merchants agree to charge the card in installments when the total purchase amount is within the credit card limit . For Latin American consumers, installment payments are a common and popular payment method, even for small purchases. According to EBANX research , 60% of e-commerce purchases are made using installment payments.  

Another local payment method for e-commerce is Mexico’s OXXO. OXXO is a voucher payment option that is ubiquitous in more than 21,000 OXXO convenience stores , providing unbanked and security-conscious consumers with the ability to make online purchases with funds.

In Argentina, Rapipago and PagoFácil enable offline payments for online purchases through their extensive physical outlets .

The growing demand for digital purchases and peer-to-peer payments has driven the creation of new local payment methods in Latin America to meet the growing payment needs .  

Today, local payment methods in Latin America have adapted to e-commerce , enabling multiple transactions on a single payment platform. Latin American consumers can choose global goods and services . With the promotion of personalization and the development of lifestyles, this consumption demand will continue to increase. The richness and convenience of payment methods can promote the accelerated development of related businesses . It can be seen that local payment methods are the engine of economic growth in Latin America .

During the epidemic, the e-commerce penetration rate in Latin America almost doubled. Consumers in Latin America have gradually developed the habit of online payment, and the demand for e-commerce continues to increase. The Latin American e-commerce market has huge room for development.

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