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Mid-Year Update from LATAM

Is Latin America Living Up to the Hype? Here's our Mid-Year Update from the Region.

It’s hard to believe we’re already half way through the year.  In January we sat down with our Latin American payments experts to review 2017 and get their predictions for 2018.  Six months on, we sit down with Juan Stadler, Business Development Director for Latin America, to get an update and see whether Latin America continues to be a region to watch.

What have been your top 3 highlights of 2018 so far?

It’s been a very dynamic semester. We’ve seen our Brazilian Acquiring business grow week after week while we add new features.  We have built AuthPlus – a routing engine to our gateway -that enables merchants to optimize their acceptance rates and minimize processing costs, across all acquirers in the region. Lastly we’ve been moving rapidly and working together with schemes and Central Bank in Argentina to launch our acquiring services.

The integration between two large companies (Vantiv and Worldpay) gave us more resources and synergies.  We’ve experienced a snowball effect that has allowed us to implement three big projects in Latin America within a semester.

We predicted some major changes across the payments landscape in the region.  Do you think we’re starting to see these? 

Definitely, deregulation across countries that have been in a consolidated position for years is happening as we speak. Argentina, Colombia and Chile are good examples. It takes time but we are ready to take advantage of the momentum, extend our presence and bring cutting edge technology to a region that is a step behind other leading markets. Merchants that have been clamming for e-commerce best practices for ages will now have the chance to catch up with global e-commerce leaders in terms of functionality.

And, if yes, what have been your highlights? 

As Colombia and Argentina follow the trend to open their payment landscapes many new opportunities appear. By end of year we will have the four major economies of Latin America with an open and competitive scenario. The rest of the markets will follow the trend so we will have many years to enjoy.

Last but not least, we are seeing eWallets like Mercado Pago or PayU crossing from the digital world to physical. And disruptive merchants like Rappi and Glovo bringing thousands of traditional stores or restaurants into an App. Borders between digital and physical are blurring more than ever before.

Which Latin American markets offer merchants the most potential – and why?

Brazil, Mexico because of their size; and Argentina and Colombia because of the e-commerce momentum. The four markets combined represents more than 85% of the Latin American GDP, Internet access penetration is high, and there are a large ratio of mobile users. It is a very interesting and strategic market for eCommerce players and thus for Worldpay.

In January we talked about the potential opportunities in Argentina, with the Central Bank looking to open up the payments landscape.  Have we seen any progress here?

 

Yes, we are developing our platform to support local mandatory aspects. The pilot will later this year. Our acquiring services will be a game changer for an industry that has been locked since it was born.

We predicted a growth in Latin American companies expanding outside of the region.  Have we started to see this happen?

Not that much. Companies expanding outside the region are still exceptional. Latin American companies are seeing there’s still a lot of growth within the region, opportunities are around the corner so there are not many incentives to move to regions where competition is aggressive and margins are thinner. It may distract your focus from existing operations in a region with huge potential for growth.

On the other side, we see US and EU companies entering into a mature cycle - where mergers or acquisitions with Latin American companies looks attractive for several reasons (saving time, localization, time to market, etc.) We see this trend growing and accelerating in the region.

What are you looking forward to the most in the 2nd half of 2018?

The average authorization rate for card-present (CP) transactions is 96 percent, while the authorization rate for CNP transactions is only 85 percent so I am very excited to see AuthPlus rolling out across Latin America. This smart routing engine will help our merchant partners optimize false declines from issuers, as it increases revenues and improves user experience.

All in all, it’s been an exciting first half of the year in Latin America – but it looks like there’s a lot of exciting things still to come.  If you’d like to find out more about anything in Juan’s blog – or want to discuss how we can help your business succeed across the region, get in touch here.

Written by:   ,  1 Aug 2018