Interview with Latin American Payment Experts EBANX
We got together with Ben Winterroth, Channel Distribution Manager at EBNAX and asked his thoughts on the payment landscape in Latin America. EBANX is the leading cross-border commerce platform in Latin America connecting global merchants with local consumers. It allows global companies with local or international operations to connect to hundreds of payment methods in Latin America. It has helped more than 70 million Latin Americans access global products and services across more than 1,000 international websites. Strengthen your payments set up in Latin America and see how you can connect to EBANX via IXOPAY here.
How have online payments evolved across Latin America and what markets have seen the largest growth in recent years?
Online payments have been evolving right alongside digital commerce. In Brazil, one of the largest markets in the region, eCommerce started to gain traction around the 2010s. A few years later, cross-border eCommerce was just something people who had an international credit card (that could process foreign currencies) could access. The payments industry has been in lockstep with the eCommerce industry ever since. Moreover, the acquiring industry in the region started to open up. Brazil was one of the first countries to do so, but we see this happening now in other countries, like Chile and Colombia, helping the online payments industry evolve.
Today we see many new payment options arise, like eWallets, which had an impressive growth in 2020. Data from our last annual study about digital commerce in the LatAm region, Beyond Borders, show that digital wallet purchases within eCommerce grew 20% in Colombia and 32% in Chile, for instance. Chile saw an impressive 188% growth of debit card use for eCommerce transactions between 2019 and the end of 2020. This helps us see the importance of offering the relevant payment methods and payments strategy for each country you want to operate in.
What are the issues that merchants face when entering the Latin American Market and how does EBANX solve these issues?
Latin America is certainly not a market where a one-size-fits-all solution works – especially for payments and the tax/regulatory implications that go along with it. It is a region composed of over 30 countries and each one of these countries has their own culture, habits, consumer behavior, and payment methods. The payment landscape in Latin America is extremely fragmented and imposes a great challenge to online merchants who want to go beyond offering international acquiring (international credit cards) as a payment option.
Cash-based vouchers, for example, is a prevalent form of eCommerce payment for the large population of unbanked customers in Latin America. However, each country has their own version that operates differently. In Brazil, you have boleto bancário, in Mexico, OXXO, in Colombia, baloto, etc. The same goes for debit cards, domestic credit cards, installments, bank transfers, and eWallets. Each country has its own way of using these payment methods and regulations that govern them.
EBANX takes all of this payment complexity in Latin America and unifies it into one integration! Through a single platform, we allow global companies with local or international operations to connect to hundreds of payment methods in Latin America. This ultimately allows them to significantly increase their total addressable market, approval rates, and conversion rates versus international acquiring alone. In fact, only around 19% of the Latin America adult population have a credit card at all, as shown by reports from the World Bank. And only about 30% of credit cards in the region are enabled for international purchases. So there is a huge revenue uplift potential by offering local acquiring and alternative payment methods that EBANX opens up.
What do you think the future payment trends will be across Latin America?
I believe we will continue to see a growing adoption of eWallets and new forms of instant payments. With the digitization process that was accelerated during the pandemic, many Latin Americans transitioned to eCommerce and digital payments out of necessity. While we don't see traditional cash-based payment methods disappearing, we do see them evolving. For instance, we already see a phenomenon in Latin America which is the 'digitization of cash': people choose to pay with cash vouchers within an online store or marketplace, but then they go to their internet banking, or banking app, to pay this cash voucher electronically and online. Also, it shows how the payments landscape, the eCommerce landscape, and the consumer behavior change in Latin America – launching brand new payment methods, like real-time payment method, PIX, in Brazil, at the same time as adapting the user experience of very traditional ones, like cash vouchers.
What does EBANX have planned for the future?
Our focus has always been 100% on Latin America and we will continue to do so. We want to be the best solution for global merchants looking to expand their sales in Latin America, regardless of their operational model. We are focusing on going deeper into Latin America, not only expanding our footprint into five new markets this year but also strengthening our local connections with new integrations and partnerships in order to offer the best experience to both merchants and local consumers.
We have recently announced our expansion to Paraguay and Central America & Caribbean, increasing our portfolio to 15 countries in Latin America. Also, we launched EBANX ONE, a proprietary payments platform that offers hybrid combinations of local and international operational models in one system integration. We also just announced a US$430 million investment round from Advent International that will support our expansion, product development, and talent recruitment efforts.
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EBANX is the leading cross-border commerce platform in Latin America connecting global merchants with local consumers. The company was founded in 2012 to bridge an access gap between Latin Americans and international websites. Using proprietary technology, EBANX allows global companies with local or international operations to connect to hundreds of payment methods in Latin America, through a single platform, regardless of their operational model or type of settlement. It offers more than 100 local payment methods and has helped more than 70 million Latin Americans to access global products and services across more than 1,000 international websites. For more information, visit https://business.ebanx.com/en/.
IXOPAY is a payments orchestration platform enabling independent, flexible and global payment processing. As a highly scalable and PCI-DSS certified “fintech enabler”, IXOPAY fulfills the needs of large merchants as well as those of “white label” clients: payment service providers (PSPs), acquirers and independent sales organizations (ISOs). The modern, easily extendable architecture offers smart transaction routing & cascading, state-of-the-art risk & fraud management, fully automated reconciliation and settlements processing, comprehensive reporting as well as plugin-based integration of acquirers, payment service providers and alternative payment methods (APMs).
IXOPAY is part of the IXOLIT Group, founded in Vienna, Austria in 2001. With local entities in Austria and the USA, IXOLIT supports national and international customers across various industry verticals. The owner-led and -financed company has grown from 2 to more than 65 employees and is focused on building innovative solutions for eCommerce.
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