Can you provide us with some information related to PagSeguro and UOL? What is BoaCompra’s role in this group of companies and whom do you target?
UOL is Brazils largest internet content, digital products, and services company. The company provides a diverse range of digital solutions like web hosting, cloud solutions, e-learning publishing, and financial technology solutions.
The credibility and resourcefulness of UOL as a parent company was key to the success of its payment platform, PagSeguro, a disruptive provider of financial technology solutions focused primarily on micro-merchants, small companies, and medium-sized companies in Brazil. Besides operating as an acquirer, its business model also covers multiple digital payment solutions, in-person payments via point of sales devices, and prepaid cards services. Lastly, it is also important to mention that PagSeguro went public on the New York Stock Exchange in January 2018.
Now let’s talk about BoaCompra, PagSeguro’s international business unit. Our company has been processing cross-border transactions since 2004 and serves international online merchants with over 140 local payment in all the major LATAM countries and other territories. The LATAM market is especially significant for many merchants because it already gives access to more than 150 million shoppers.
The main hurdles many merchants are facing while expanding in the region are payments, shipment, and tax clearance. The first step is clearly to find the right payment provider and benefit from its guidance. Payments don’t work in LATAM like in the rest of the world: according to our estimates, only 22% of credit cards issued in Brazil are enabled for international transactions. Cards must be processed locally, in native currency, and customers pay in installments. Also, many consumers prefer cash-based or other alternative payment methods.
Therefore, it’s important to deal with a payment provider that is directly connected to the card schemes, aggregates all payment methods in the region through modular checkout solutions, processes transactions locally, and collects/remits payments everywhere in the world. Selling in the region without a local presence is now feasible and easy for both physical and digital goods.
What is the rate of the ecommerce growth in the markets your company serves and what verticals are particularly interesting?
Despite a recent economic slump in the region, which looks now partly overcome, ecommerce sales in Latin America will grow by 18% in 2018. Some countries like Brazil are gaining maturity now and decreasing the rate of their ecommerce growth, whereas other markets such as Argentina have more recently opened to cross-border business and are finally getting traction.
Ecommerce is growing in all verticals. The big publishers of digital content and services are already present in most of the region: the offer of games, travels, software, over-the-top services (“OTT”) is not very different from the one available in more mature western markets. Also, Latinos are heavily equipped with smartphones, and all worldwide popular apps are available locally on the main App Stores.
As for physical goods, American giants like Amazon have no big footprints locally and Chinese cross-border marketplaces have taken a clear lead over their competition.
BoaCompra has recently expanded to Uruguay. What are the opportunities for merchants to tap into the LATAM market?
Our company already covers all the big markets in the region, namely Brazil, Argentina, Chile, Peru, Colombia, and Mexico. Uruguay is a first move towards smaller and complementary territories in the region and our next move could probably be in Central America.
Through a payment provider with BoaCompra’s expertise, it is very easy for merchants to expand their current offer to an incremental amount of new and tech-friendly customers through a single plug-and-play integration. This type of setup brings a lot when it comes to performance and time to market.
I want to take this opportunity to state that we also cover Spain, Portugal and Turkey. These markets present some similarities with the LATAM payment ecosystem and could be a worthwhile strategic expansion for several international platforms.
What are the main entry strategies for Brazil: direct or via ecommerce platforms? What are the leading ecommerce platforms in LATAM?
Latin America is full of potential, but also specific in many regards when it comes to payments: low penetration of international cards, not stabilised economies, foreign exchange volatility and even the popularity of local payments should be taken into consideration.
Understanding each market, establishing communication localisation and respecting online customers’ preferences in each country are critical strategies for the expansion of any international business. Most merchants, publishers, and marketplaces are currently successfully addressing the local markets directly through a cross-border approach.
Regarding the leading ecommerce platforms in LATAM, companies such as B2W in Brazil, Linio in Mexico or Mercado Livre in the whole region are some of the local big players that are also present locally. Likewise, we can see some successful initiatives of international ecommerce platforms like Shopify or Magento.
What payment methods do you believe are critical to offer in LATAM?
Considering our payment mix, local cards represent 55%, cash-based payment methods 30%, wallets 8%, and bank transfers 7%. These last two groups are finally getting traction.
As we have seen, aggregating all preferred payments methods is key in LATAM. Also, in countries such as Argentina, Brazil, Chile or Uruguay, for example, paying in installments is embedded into local card options and merchants should always take these types of unique features into consideration when carrying on international businesses. Customised checkout solutions are sometimes necessary and BoaCompra’s local expertise often makes the difference to optimise conversion.
About Alain Delcourt
Alain Delcourt is Managing Director at BoaCompra, a PagSeguro company. He has 20 years of expertise in ecommerce, payments, and digital goods distribution in LATAM. Prior to BoaCompra, Alain co-founded several ventures, which turned him into a versatile executive, known for his skills to build multicultural teams and a relaxed work environment.
About BoaCompra
BoaCompra has been offering local payment methods for international platforms since 2004 and is part of PagSeguro, a disruptive provider of financial technology solutions in Brazil. By partnering with us, you will be able to connect your business to millions of potential customers, increasing your conversion. Following a simple integration process, your company can start accepting the main payment options across all major countries in Latin America and other territories.
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