An exciting and successful year for Latin America
1. What have been your highlights of 2017?
2017 was a phenomenal year for Worldpay in Latin America. We more than doubled in size; consolidated our commercial and relationship management teams, grew our customer base and successfully launched our local acquiring solution in Brazil.
Our expectations for 2018 are to grow our business even more and to continue being a relevant and disruptive player in the Latin American market.
2. What major eCommerce or payment developments do you see coming in 2018? And which ones excite you the most?
Latin America’s eCommerce markets are growing but are still nowhere near their full potential. There is so much we can do and for me it´s exciting to see new players, such as Worldpay, entering this market: bringing important change and improving the industry´s landscape. We are introducing first world functionalities to emerging markets, providing faster transactions, minimizing friction, bringing a new dynamic to the local economy and thus, disrupting the market. It’s going to be an exciting year.
"Our research into the Internet of Things (IoT) found that 89% of Brazilian consumers would use a virtual assistant to book entertainment whilst on holiday. Brazilians are the bravest - ready to leave their comfort zone and to try new technologies much more than people from other countries in LATAM"
3. 89% of Brazilian consumers would use a virtual assistant to book entertainment whilst on holiday. Do you think Latin American travel providers are embracing the opportunities IoT offers?
Brazilians are less afraid of leaving their comfort zone, to try new technologies, than people from other countries in LATAM, according to our Connected Consumer research. There´s only one catch, they are only open to it if the new technology works properly and makes their lives easier. I believe ultimately this is the reason IoT is moving at a slower pace in emerging markets. There is still a lot of work that needs to be done in terms of infrastructure, networks and internet access to ensure consumers are getting the best possible experience from IoT. In the end it´s really quite simple, the better the experience, the faster consumers will adapt to and adopt IoT.
4. Our Global Payments Report identified Argentina as the fastest growing eCommerce market in the region. What do you think is driving this growth?
Argentina was one of the first countries in Latin America to experience eCommerce. Actually, the largest eCommerce players in the region, who entered the market in the early 2000s, were born in and are still headquartered in Argentina. When compared to Brazil, Argentina presents less risk of fraud and more opportunities to bring innovative solutions to the country´s payment industry. Internet access is high - reaching 80% of its population, and the country has the largest ratio of mobile users in Latin America. In recent years Argentina´s Central Bank has been working hard to incentivise eCommerce and to open up the payments landscape for international players. All of these facts combined make Argentina a very interesting and strategic market for us and eCommerce players.
Visit our latest Global Payments Report to explore further.
"More than half of the population in Latin America still don't have bank accounts or any relationship whatsoever with banks. We want eCommerce to be available to anyone, but today a lot of people are excluded. To me this is something that needs to change and that I believe will change 10 years from now - and hopefully even sooner with growth already happening in the payments space." - Esteban Sarubbi, VP Commercial, Latin America, Worldpay eCom
5. Credit Cards still dominate as the preferred payment method across the region. What other payment methods should merchants operating in Latin America consider in 2018?
Credit cards definitely are the preferred payment method today, representing up to 80% of payments and close to 90% in some industries, like Travel & Airlines. Cash payments and vouchers (boletos) are still greatly used, but we´ve also observed a growing interest in local e-wallets, like MercadoPago or PayU. We have started to receive more questions from our customers about e-wallets; around how to implement them into their businesses.
E-wallets are growing very rapidly but there are still some infrastructure concerns and actions the market needs to take in order for e-wallets to really take-off, like in other parts of the world. Beyond that, we already know that some of the largest wallets in the world are looking to enter the Latin American market. We expect to see them to have a significant impact on the payment landscape across the region.
6. We’ve added some new markets into this year’s Global Payments Report. Which of these do you think offers the biggest opportunities for Latin American businesses looking to expand overseas?
In the past, few companies in Latin America looked to expand their operations overseas. Most would stay within the borders of the region. For example, a company from Argentina would go to Brazil, a company from Colombia to Argentina and so on. Few companies in Latin America wished to expand to North America, Europe or Asia. This was due to the difficulties they found when trying to start their operation in another market. Becoming an international company was believed it to be too complicated. But this is starting to change since companies like Worldpay started showing how easy and profitable internationalization can be and because we are simplifying business for these companies. The resistance is starting to fade and I believe we will have a lot more Latin American companies expanding overseas in the near future.
Take an in-depth look into the local markets within LATAM within our range of local brochures which explore the payments mix in each one.
By 2050, the number of people over 60 will triple in Brazil. Maximising conversion amongst silver surfers is complex – but can produce excellent results. Recently for an airline customer we did some research and suggested they offer the two most common payment methods among the target older age group. Sales increased 3%!
7. We’ve identified ‘Silver Surfers’ as a key market segment. How do you think Latin American merchants can maximise on this opportunity in the region?
Most companies in Latin America are still trying to solve their strategy to satisfy millennials. Silver Surfers are not in every conversation we have with our customers, however we always mention that it’s getting increasingly important for companies to consider the “silver surfers” in their eCommerce strategies. According to the Futures Company’s Global MONITOR research, 60% of global consumers aged 50+ say they’ve purchased a product or service online, compared to 51% of 16-34s, and 56% of 35-49s. According to the E-bit Report, the population around the world are ageing and by 2050, the number of people over 60 will triple in Brazil. This is definitely a generation that can´t be ignored.
When we work on the payment journey with our customers, we examine market trends and preferences – and ensure we optimise the journey for each market segment. Maximising conversion amongst silver surfers is complex – but can produce excellent results. For example, we recently implemented a strategy with one of our airline customers, analysing the two most common payment methods the Silver Surfers were choosing and only showing those ones during checkout. We understood that showing more than two methods was actually increasing drop off rates for people over 50. By only showing two methods, sales increased by 3%!
8. Let’s fast forward 10 years. What do you think the Latin American eCommerce landscape will look like?
More than half of the population in Latin America still don´t have bank accounts or any relationship whatsoever with banks. We want eCommerce to be available to anyone, but today a lot of people are excluded. To me this is something that needs to change and that I believe will change 10 years from now (hopefully sooner).
There are also a lot of discussions around what the future holds for credit cards; with the revolution that is taking place, led by large corporations such as Apple, Google, Samsung, etc. I believe credit cards will become obsolete in the coming years and eventually disappear. I’m convinced payments being made through e-wallets, smartwatches, smartphones, smart glasses and many other gadgets and wearables that haven´t even been invented yet are here to stay and to will eventually kill off credit cards. Ultimately, all purchases will be frictionless.
9. Finally, which Latin American businesses are doing great things when it comes to the online experience?
There are 3 or 4 huge eCommerce companies in Latin America that are definitely the ones to follow: Mercadolibre, Despegar, Volaris, Bestday, just to mention a few from different verticals. They are setting the bar very high in terms of simplifying the shopping process, refining functionalities and ultimately improving the consumer experience in such a way that all others have no choice but to follow if they wish to remain a player in this market.
Another really cool thing that is happening in our region? Many global companies with a strong eCommerce background are coming to Latin America and making local companies adapt to their business model, improve their functionalities and processes. These global companies have done some great things in the eCommerce ecosystem and are helping advance the eCommerce market in our region.
Latin America continues to be a diverse – and interesting – region in terms of eCommerce, with huge potential for growth.