Payment processing in Latin America: Do's and Don'ts

Being one of the fastest-growing digital markets, Latin America (LATAM) is very promising for e-commerce. However, to succeed, international merchants need to know the specifics of this region.

To help you get a clear picture of payment processing in LATAM, we break down what you should and shouldn’t do for high conversion.

Why is the LATAM payment market unique?

Latin America is the market where a large portion of the population doesn’t use cards for online payments. Whether it’s because people don’t trust traditional banking or because it isn’t accessible in some regions, alternative payment methods (APMs) dominate LATAM.

The most popular APMs are:

• Instant bank transfers. Systems like Brazil’s Pix allow customers to send money via phone number, email, or QR code scanning. The instant transfer is completed directly between bank accounts in less than 2 seconds, anytime, any day. Then there’s SPEI in Mexico, PSE and Transfiya in Colombia, DEBIN in Argentina and PagoEfectivo in Peru.

• Cash-based vouchers. Mexico’s OXXO is one of the most popular cash-based solutions in LATAM. Using it, customers can pay for online purchases in cash at any nearby convenience store.

• Local credit cards. In countries like Argentina and Colombia, users can split almost any purchase into monthly payments (cuotas). 

Don’ts of payment processing in LATAM

If you want to have high conversion rates in this region, don’t:

• Don’t rely only on international banks. Due to strict rules, local banks can decline foreign transactions. To avoid this, partner with a licensed payment service provider (PSP). It will help you accept online transactions through APMs and remain compliant with all regulations.

• Don’t forget to offer instalment plans. Local customers like to pay in parts for e-commerce goods. You risk losing a lot of sales if you don’t offer them this option.

• Don’t neglect mobile optimisation. LATAM is a mobile-first region. A checkout that isn’t optimised for smaller smartphone screens can lead to high cart abandonment.

Do’s of payment processing in LATAM

Here’s what you need to do to drive sales in Latin America:

• Offer popular APMs. Make sure your checkout has local favourites. It will allow you to reach more customers, including those without bank accounts.

• Prioritise security. Locals often distrust online payment methods due to fraud, which remains a big problem in LATAM. To build customer trust and secure digital transactions, use strong anti-fraud tools. These can include encryption and tokenisation, multi-factor authentication (MFA), and smart fraud detection.

• Offer offline APMs. In some regions, internet connectivity may be unstable. To prevent this from becoming a barrier to payments, include alternative offline solutions at your checkout. Amongst the top APMs are: OXXO in Mexico; Boleto Bancário in Brazil; Pago Fácil and Rapipago in Argentina; Efecty and Via Baloto in Colombia; and PagoEfectivo in Peru.

How partnering with Payop helps you boost conversion in LATAM

Partnering with Payop is the way to simplify your expansion into new regions. Whether you are entering Latin America, Europe, Asia, or Africa, Payop will be your reliable partner. Here’s why:

• We handle compliance with local and global regulations, saving you significant time and effort.

• Payop offers a wide variety of payment methods, including alternative ones. This helps you meet the expectations of almost any customer, regardless of the region where you operate.

• Our platform is scalable and built to handle traffic growth. We constantly update our systems and monitor operations in real time to catch and resolve any issues instantly.

• Payop is an experienced provider with expertise in LATAM and other regions. We know exactly what the requirements and specifics of each market are.

• A dedicated account manager will help you with any questions and guide you through all steps of the process.

Ready to reach a new level? Contact us at sales@payop.com.