Online shopping growth fueled by local payment systems in Latin America

In the dynamic world of eCommerce, Latin America is rapidly emerging as a key player, and alternative payment methods (APMs) are leading the charge. A recent study underscores this potential for growth, highlighting that APMs are expected to surpass card payments in major LATAM markets by 2026.

The diverse and evolving payment ecosystem in Latin America is a central focus for FinTechs and merchants looking to tap into the region's eCommerce potential. Preferred payment methods in LATAM include Pix, eWallets, and cash-to-digital solutions. Nearly seven in ten consumers are unlikely to complete transactions on websites that do not offer their preferred methods of payment, underscoring the importance of adapting to the diverse and evolving payment landscape.

Several FinTech entrants are aiming to meet Latin America's growing local payment needs and eCommerce growth. Companies like Nuvei, Gowd, and Cheche Group are expanding their reach in the region. Nuvei, for instance, integrated with Zuora to enhance subscription payments in Latin America, while Gowd is expanding with crypto-native finance infrastructure and local leadership hires for technology and expansion.

The opportunity for global players to succeed in Latin America's eCommerce market is increasing. Chinese eCommerce brands have overwhelmingly positive perceptions in LATAM, but brand loyalty is weaker compared to shoppers in the United States. However, Carlos Menendez, Chief Operating Officer of dLocal, stated that success in LATAM eCommerce depends on meeting consumers where they are and offering the payment options they trust.

The study further highlights the importance of localizing offerings to cater to the preferences of digital-first consumers in Latin America. The growing impact of young, digital-first consumers on the retail landscape in Latin America is crucial for success in the market. The report suggests that understanding and adapting to these preferences is key, with quality and affordability being key purchase drivers in LATAM, while delivery speed is a top consideration for fewer than 6% of respondents.

The study reiterates the importance of localizing offerings to meet the preferences of consumers in Latin America. APMs are projected to represent 69% of all eCommerce transactions globally by 2029, accounting for more than $360 billion in value. dLocal simplifies complexity for global merchants by enabling seamless access to over 900 local payment methods across more than 50 markets.

In conclusion, the accelerating shift toward APMs in Latin America's eCommerce market mirrors the global trajectory where APMs are projected to dominate eCommerce transactions. The study underscores the potential for international players to capture market share in Latin America's growing economy, making it an exciting frontier for eCommerce growth.