Latin America (LatAm) is experiencing a significant surge in digital commerce, characterized by an increasing preference for alternative payment methods. This growth presents opportunities for fintech companies to expand and cater to the diverse payment preferences across the region. Amid this evolving landscape, Spreedly, an open payments platform, has joined forces with EBANX, a global payment service provider, to offer localized payment solutions for international companies aiming to penetrate the LatAm market. The partnership aims to facilitate easier access to a variety of payment methods, ultimately enhancing customer satisfaction and supporting business growth.
Importance of the LatAm Market
The partnership between Spreedly and EBANX focuses on leveraging the strengths of both companies to address the unique payment needs of LatAm. The collaboration spans 17 countries, including major markets like Brazil, Mexico, and Colombia, as well as emerging digital economies such as Peru, Chile, and various countries in Central America and the Caribbean. This extensive reach is crucial as the LatAm market is known for its diverse payment preferences, driven by the region’s rapid digital transformation.
Rose François, Vice President of partnerships and business development at Spreedly, has highlighted the significant role of LatAm in the global expansion of digital commerce. The need for a wide range of payment options is paramount to cater to the varying preferences of consumers across the region. Moreover, countries like Mexico and Peru are expected to grow at a substantial rate, with projections indicating annual growth rates of 25% and 20%, respectively, up to 2027. Similarly, Brazil’s online market is forecasted to expand from $346 billion to $586 billion. This indicates a rapidly growing market with immense potential for international companies.
Daniel Kornitzer, Vice President and head of global partnerships at EBANX, echoed these sentiments by emphasizing the untapped potential within the LatAm region. The collaboration aims to provide merchants with the tools and infrastructure needed to navigate and thrive in these burgeoning markets. By offering a variety of payment methods that reflect local preferences, the partnership seeks to ensure a seamless and efficient payment experience for customers, ultimately driving business growth.
Benefits for Merchants and Consumers
One of the primary advantages of the Spreedly and EBANX partnership is the high transaction success rates achieved through advanced orchestration and optimized payment rails. The combination of Spreedly’s orchestration capabilities with EBANX’s direct integrations and local acquiring partnerships allows for faster, more secure transactions. This improvement in transaction efficiency is essential in enhancing customer satisfaction and fostering loyalty. Furthermore, the easy integration process offered by the partnership enables merchants to quickly access multiple local markets, capitalizing on a broad range of payment options.
Merchants stand to benefit significantly from this collaboration, as it aids in scalability, cost optimization, and compliance with local regulations. The partnership’s structure ensures that international companies can seamlessly integrate their payment systems and adapt to the specific requirements of each market within the LatAm region. This adaptability is crucial in navigating the regulatory landscape and meeting the diverse needs of consumers.
The success of Brazil’s Pix, an instant payment system, exemplifies the potential of alternative payment methods in the region. With Pix accounting for 33% of online travel payments and expanding its reach into various sectors, the integration of Pix with the partnership’s platform facilitates faster, more secure, and low-cost transactions. The upcoming Pix Automático feature, which will enable recurring payments, further underscores the system’s ability to enhance convenience for consumers and business efficiency.
The Role of Traditional Payment Methods
Despite the rise of alternative payment methods, traditional credit and debit cards continue to hold a significant market share in LatAm. These methods account for 54% of total digital commerce in the region, with local credit cards representing a substantial portion of this value. In Brazil, local credit cards make up 34% of the total value, and in Argentina and Ecuador, they exceed 20%. This highlights the importance of integrating multiple payment options to cater to the diverse needs of consumers. Daniel Kornitzer emphasized that the combination of traditional and alternative payment methods is essential in delivering a comprehensive and satisfactory customer experience. For instance, while Pix has revolutionized the payment landscape in Brazil, offering more secure and swift transactions, the inclusion of conventional credit and debit cards ensures that a broader segment of the population can engage in digital commerce. This inclusive approach is vital in fostering customer satisfaction and loyalty, as it accommodates varying payment preferences and capabilities.
The partnership between Spreedly and EBANX aims to tap into this dynamic payment ecosystem, ensuring that merchants can provide a wide array of payment options. By doing so, they enhance their chances of meeting customer expectations, reducing cart abandonment rates, and ultimately driving business growth. The collaboration is designed to create a robust, flexible, and efficient payment infrastructure that supports international companies in their endeavors to enter and succeed in the LatAm market.
Future Considerations and Takeaways
Latin America is witnessing a notable surge in digital commerce, marked by a growing inclination toward alternative payment methods. This expansion creates valuable opportunities for fintech companies to grow and accommodate the varied payment preferences throughout the region. In response to this dynamic environment, Spreedly, an open payments platform, has partnered with EBANX, a global payment service provider, to deliver localized payment solutions to international companies looking to enter the LatAm market. The collaboration seeks to streamline access to numerous payment options, ultimately boosting customer satisfaction and driving business growth. Additionally, this partnership is expected to bridge the gap between different financial systems, fostering smoother transactions and strengthening the overall digital economy in Latin America. This initiative not only highlights the importance of adapting to regional payment behaviors but also underscores the growing influence of fintech innovations in transforming the traditional commerce landscape.