Digital payments are growing fast in Latin America, threatening to overtake cash as the preferred transaction method. One study revealed that mobile bank accounts in Latin America increased by 67% in 2020, and QR code payments are also quickly gaining ground. Brazil’s Pix system, operated by the country’s central bank, attracted 60% of the country’s population in its first 10 months, and Argentina’s Mercado Pago has processed more than 8.5 million QR code payments since its launch in 2018.
International eCommerce is growing faster than domestic eCommerce all across the region, another development that can be attributed to the pandemic’s effects on online shopping. Customers shopping from the comfort of their homes do not care where their goods originate from, and merchants from far-flung countries can often offer better prices than domestic sources. Last year saw huge boosts in cross-border purchases in Chile, Colombia, Mexico and more.
The “Global Commerce Tracker®” examines the latest developments in the burgeoning Latin American eCommerce market and how merchants looking to invest can understand the ins and outs of the region.
Around the Global Commerce Space
Business-to-consumer (B2C) eCommerce is booming across Latin America, with experts predicting the market will grow by 19% this year to reach $164.1 billion in 2022 and $284.8 billion by 2026. Several factors are driving this growth, especially mobile commerce and international shopping.
Latin America is also shaping up to be a hot spot for new retail trends, with a recent survey finding that 29% of technology startups in Bolivia are geared toward eCommerce. This was the largest category of startups surveyed.
For more on these and other stories, visit the Tracker’s News and Trends section.
How eCommerce Can Unlock the Latin American Retail Scene
Latin America represents a prime opportunity for eCommerce, especially as the pandemic has radically altered consumers’ shopping habits. Brick-and-mortar shopping was previously the name of the game, but eCommerce market penetration skyrocketed when social distancing became the norm. It would be unwise to view the LatAm eCommerce landscape as a monolith, however, and not as the incredibly diverse set of countries and consumers that it is.
To get the insider POV, PYMNTS spoke with Karen Bruck, vice president of commerce and strategic initiatives at Mercado Libre, who explained the unique opportunities and challenges of Latin American eCommerce.
Challenges and Opportunities for eCommerce in Latin America
eCommerce is soaring in Latin America, with its value currently pegged at $382 billion and some experts projecting it to reach more than $700 billion by 2025. This growth is due in large part to the rise of real-time payments across the region, as well as eCommerce marketplaces’ emergence as winners in the pandemic-fueled competition for a convenient shopping and payments experience.
This month’s PYMNTS Intelligence examines this and other trends in the region, including increased domestic and cross-border spending, greater market penetration of digital goods and an increased acceptance of digital payments.
About the Tracker
This edition of the “Global Commerce Tracker®,” a collaboration with Worldline, examines the latest developments in the burgeoning Latin American eCommerce market and how merchants looking to invest there can understand the ins and outs of the region.