Challenges of expanding to emerging markets. LATAM

Fintech’s development and contribution to global digital growth is unparalleled by any other industry. Growth and expansion doesn’t come without its challenges for merchants who seek entry to new markets without preparation and local knowledge. Latin America is a booming market, with vast potential in its eCommerce landscape, making it a prime location for those eager to expand their margins.

Penetrating an international market, like Latin America, which is on the incline of development can bring challenges for a non-native merchant. Being such a large region, the payment methods vary. Whilst cards are a preferred payment method in areas such as Brazil, cash payments are still relevant because of the disparity in accessibility. Additionally, Mexico is largely a mobile-driven market, with a heavy use of credit cards and direct bank deposits for online payment methods.

Latin America’s large coverage has more than 33 countries and 650 million people – so it’s hard for a merchant to ensure that they are accessible to the market for all. In order for a merchant to successfully fit into the market, Unlimint’s acquiring solution would plug the gap in knowledge at a faster speed, and more cost efficiently than independently partnering with numerous payment methods. As digitalisation begins to surge (as seen in Mexico, where there has been a 32% year on year growth in ecommerce since 2020), there’s an undeniable drive for merchants to venture to Latin pastures, but their success is dependent on their preparation. As an already established fintech innovator with over a decade of experience, Unlimint has also been on the ground in Latin America to build local knowledge and understanding of consumer behaviour.

The underbanked

Latin America has large pockets which are still largely driven as a cash heavy environment, particularly Mexico, but there is clear insight to show that Latin America is in a position of reaching a digitally sufficient trajectory. Therefore, in the coming years, it is expected that the number of people unbanked will decrease and will continue to see an increase in card payment methods – e.g. Visa, Mastercard, local schemes and AMEX. This is also why merchants need to choose a payment provider like Unlimint, that offers a full set of payment methods for Mexico (and for other LATAM countries).

Alternative financial solutions are key for those who are underbanked and unbanked, which is seen through the vast array of uptake in alternative solutions. Pix Brasil is a popular alternative used for purchasing; and is also included in Unlimint’s payment acquiring solution along with Boleto, Loterica, bank transfers and local card acquiring options. Inclusivity is fundamental for ensuring that expansion into the Latin American market is effective and successful for a merchant. By taking a similar focus to Unlimint by keeping a determined view of the economic landscape, at a local level, we are able to stay ahead of developments in the payment sphere and adapt rapidly – thus benefiting our merchants.

Flexibility is Key

In the last 2 years, an exponential growth has been seen in the growth of mobile internet users across Latin America, which is expected to increase to approximately 424 million users by 2025. The increasing prevalence of technology is heightened by LatAm’s young consumer base who will become connoisseurs of technology and benefit from online banking and alternative payment methods on a daily basis.

Whilst the gap in mobile usage is still fragmented in the region, it is still increasing rapidly. Merchants seeking access to the Latin American market may face challenges in future proofing their product to not only include the current payment methods, but also be ready for the future evolution of acquiring payments. This dire need for flexibility is reflected in Unlimint’s offer of numerous alternative payment methods, including wallets, vouchers, cash payments, mobile payment methods and cryptocurrencies.

The flexibility offered in fintech solutions has been widely welcomed in the region, showing a commercial appetite from consumers and merchants. Consequently, Latin America has become a hotspot for businesses and the digitalisation of regions has been further hastened since the pandemic. Rapid growth has been supported and controlled by regulatory acts such as Ley Fintech, which was passed by congress in 2018. In essence it shows the political support of fintech from the Mexican congress, who strive to evolve with their consumers and protect consumers. It’s a valuable step towards the future as the regulation opens space to newcomers into the region and can offer merchants the assurance that their financial partners work in the best interest of their clients. The framework brings flexibility to natives, who will now offer inclusivity into commerce, thanks to digital players – whether they are banks or non-banks.

Our team at Unlimint knows a thing or two about flexibility. Our acquiring platform offers direct connections to local and international card brands and more than 1000 of alternative payment methods. It provides merchants with a unique 360 overview of payment insights, allowing them to analyse the performance and gain access to consumer data reports in a user-friendly dashboard. Unlimint acts as a payment partner who takes care of all current and future payment trends and supports them for merchants, to guarantee that they know how to take an advantage in the “tomorrow of payments”. Our offering for LatAm is one of the strongest on the market boosted by our local acquiring licenses, direct connections to payment methods and local setup in key regions. This is why we are certain that we can provide merchants with the level of service they need to succeed in the LatAm region and that we can truly help them be ready for tomorrow.

Author: Irene Skrynova, Chief Customer Officer

Irene Skrynova is a highly respected senior executive with diverse international experience, who offers a fresh perspective and professional wisdom, challenging the status quo and driving business model transformation. Her ability to use potential threats as opportunities, as well as her bravery in implementing innovative ideas, helped her set a direction for global expansion on the payments market for Unlimint, take decisive steps in establishing local branches and strengthening the company’s overall global presence. Her  wealth of knowledge and experience in payments and business development allow her to provide expert insight and guidance on a range of projects, supporting Unlimint’s objectives of empowering successful online entrepreneurs with revolutionary merchant and banking services.