Sign up for The Paypers newsletter Follow The Paypers on LinkedIn Follow The Paypers on Twitter Follow The Paypers on Facebook Follow The Paypers on Google +
The Paypers, paypers, Insight in payments, News, Reports, Events

National Merchants Association insights into LATAM payments landscape

Wednesday 14 December 2016 | 12:50 PM CET

National Merchants Association: Jacob Bennett, Vice President of Risk and Underwriting, dLocal: Michelle Vautier, Chief Revenue Officer

NMA has recently partnered with dLocal to expand business in LATAM. What are the most important factors that have attracted interest to this particular region?

NMA: As mobile and other technologies increase card acceptance in these and other emerging markets, it is important that NMA has a partner that can help us target a growing market and expand our offerings. Projections estimate that the number of people with access to the Internet in Latin America will double from 300 million to 600 million in the very near future. In addition, with so many people gaining access to the Internet with smart phones, the demand for ecommerce and mcommerce continues to increase on a daily basis.

Besides dLocal, which other business partners do you have on the roadmap for a solid LATAM presence in the near future, and how do they actually help NMA serve this purpose?

NMA: dLocal is entrenched in the LATAM market and has the expertise and experience to help us succeed. We are planning on further expanding our presence in this market and may expand with additional partners based in Latin America or have ties in this market.

In your opinion, what are the top three markets ready for international ecommerce business in the region and why?

dLocal: For dLocal, the top three markets in LATAM are Brazil, Mexico and Argentina. Brazil comes in first by far. It is the largest ecommerce market in LATAM, and it accounts for 42% of the region’s USD 47.4 billion in ecommerce sales. Also, as of 2015, Brazil had over 39 million e-shoppers with an average purchase ticket of USD 96, which is quite high when considering the average family income is around USD 10,000 after taxes. Though not as robust, Mexico and Argentina are also high-growth ecommerce markets with a lot of potential. Today, Mexico accounts for 12.3% of the region’s ecommerce and is forecasted to reach USD 11 billion in sales by 2018. Argentina experienced a whopping 70% ecommerce growth from 2014 to 2015 and is expected to reach 14.6% market share in the next couple of years. It is fueled by the reopening of international ecommerce after 15 years of strong protectionism.

Related to the previous question, could you provide some stats as to the payments preference of local consumers in these specific three markets?

NMA: The population in all three nations is underbanked, so cash is still far and away the dominant payment preference in most of Latin America. In Mexico, for instance, ecommerce accounts for only 2% of all commerce, and there are a little more than 22 million credit cards despite the country’s population of more than 119 million people. Even though one third of all Mexicans use a smart phone, high prices and a lack of faith in the postal service continue to push 80% of consumers toward using cash-only for purchases.

According to Santiago de Chile Chamber of Commerce, the ecommerce sector in Chile will grow by 20% in 2016 with 3.5 million shoppers spending about USD 2.8 billion. But less than one fifth of Chileans own smart phones, and the vast majority of the country’s population prefers cash as a method of payment.

Internet transactions in Colombia represent 2.5% of the gross domestic product according to the Colombian Chamber of Commerce, and the growth rate for online sales is 18%. Roughly more than 50% of Colombians cite online payment security as a reason to avoid ecommerce options.

dLocal: In Brazil, Boleto Bancario is the most popular payment method – 2.36 billion prints per year. It consists of a bar code the customer takes to pay for purchase at ATMs, branch facilities and Internet banking at any bank, post office, lottery agent and some supermarkets. For Mexico, their shoppers mostly rely on cash-based payment methods, as 60% of the working population use OXXOs – a network of 30,000 convenience stores covering 100% of the country – to make ecommerce payments. As for Argentina, cash is also popular there as well, mostly made through a strong presence of convenience stores in the cities across the country.

The use of installments is another dominant payment option across Latin America. In Brazil, over 80% of offline retail sales as well as 54% of online purchases are sold with installments. In Argentina, 7 of 10 ecommerce merchants enable installments, and in Mexico, 40–50% of shoppers use installments while buying online.

Speaking of LATAM merchants, how do you characterize their present ecommerce agenda when it comes to implementing adequate O2O strategies for customer attraction and retention?

dLocal: Though historically speaking, LATAM countries haven’t been the strongest in deploying O2O strategies (especially compared to US retailers), but their growing smart phone user base is helping to change that. With more and more LATAM consumers making purchases on their smart phones, aligning with more on-demand startups getting established south of the border, the disconnect between online purchases and real-life shopping/serve experiences is closing.

dLocal partnership has granted NMA presence in Brazil, Mexico, Argentina, Colombia, Peru, Uruguay and Chile. Do you consider expansion into new LATAM markets and, if yes, do you take into consideration the political climate as a decisive factor?

NMA: Yes, while this list does cover the majority of high target markets, there are several other emerging markets that we would like to move toward in the future. That being said, both economic and political stability are key factors in determining the true opportunity in a new market.

LATAM central banks have decided to align with the US SWIFT payments system to combat financial crime. In the long run, do you think that further “integration” into the SWIFT system may have the potential to boost cross-border purchases between the two American continents? How?

dLocal: From our perspective, this SWIFT integration will definitely encourage more ecommerce companies from the U.S. (and other countries) to want to do business in LATAM countries. As with the recent news, these LATAM banks want to use SWIFT not only to become compliant with a security standard but also to enhance their transparency and build more trust with the international financial community. Just as with stock markets, the retail industry dislikes instability, so any measures that these banks can implement to show that they are safe for international ecommerce companies to do business, the better chance it can increase cross-border payments in the near and long-term futures.

About Jacob Bennett

Jacob Bennett is the vice president of Risk and Underwriting at National Merchants Association. He is responsible for making credit decisions on high-volume accounts and accounts of all risk levels as well as developing and maintaining internal policies to mitigate risk. He also oversees the association’s risk monitoring and fraud analysis program, including the Chargeback Control Platform™ (CCP). He can be reached at

About National Merchants Association

National Merchants Association is a global merchant advocacy group and a leader in merchant services dedicated to helping merchants and agent partners grow their businesses. The association works on behalf of businesses to eliminate the unnecessary and unreasonable fees associated with accepting electronic transactions.

About Michelle Vautier

Michelle is a results-driven payments executive with over 15 years of experience in emerging markets and an in-depth knowledge of the payment value chain. As Chief Revenue Officer at dLocal, she oversees sales, marketing and product. Her top priority is maximizing payment conversion rates for dLocal’s merchant customers. Prior to joining dLocal, Michelle lead Facebook's global payments strategy. Before that, she managed global expansion efforts at MasterCard, Netflix, and UPS with oversight for revenue/authorisation optimization, innovative payment product development, and partnerships. Her passion: creating a payments ecosystem that has no borders. She can be reached at

About dLocal

dLocal is the leading payments platform for Latin America and other emerging markets. By operating as the payments processor and the merchant of record in these markets, dLocal eliminates the need to set-up local entities or integrate dozens of isolated payment methods. Top global brands and ecommerce providers, including Disney and GoDaddy, rely on dLocal to eliminate international payments complexities and manage their expansion effortlessly.