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Payments and E-Commerce LatAm: Trust grows as transactions surge

Sep 7, 2020

By Katie Llanos-Small
Pagos digitales y comercio electrónico en Latam ganan confianza
The pandemic has propelled greater trust in digital payments and e-commerce in Latin America, resulting in a surge of transactions - but also a number of disruptions and new challenges, according to a new report launched today...



The “trust chasm” surrounding digital payments and e-commerce has been bridged in recent months, resulting in a huge surge in the use of digital payments and e-commerce, according to industry leaders cited in a new report launched today. But a fresh suite of challenges and difficulties has also come with the growth.

Driven by the pandemic, the online shopping and payments ecosystem has accelerated, with users rapidly adapting to new models of buying and paying, according to Payments and E-Commerce in the Americas: Preparing for the New Normal, a report published today by iupana in association with SafetyPay.

“As more and more people use services like Rappi and realize they’re safe to use, word gets around,” says Juan Miguel Guerra, general director of the Rappi-Banorte alliance, in the report. “I think that we’ve crossed the trust chasm. That’s created this huge acceleration, in a short space of time.”

Digital payments companies are also seeing rapid growth in transactions. “Transaction levels are up, we are growing from last year,” says Gustavo Ruiz, CEO of SafetyPay, a digital payments processor that enables bank transfer and cash-based e-commerce transactions.


Logistics, risk challenges emerge for payments & e-commerce

But while the pandemic has driven a huge uptake for some areas of digital commerce in Latin America, it has also thrown up new challenges. Payment transaction volumes are smaller. New logistical hurdles have appeared. And there is a new risk panorama for digital commerce.

“Payments for services that would be fulfilled in two days might now be delivered in five days, or two weeks,” says Juan Pablo D’Antiochia, general manager for global e-commerce Latin America at FIS. “Industries are pre-selling services – hotels for whenever lockdown is over, airlines giving flexible terms – that extended delivery time is changing the risk profile all around.”

As the pandemic threw the world into a delivery economy, Latin American e-commerce platforms including regional giant Mercado Libre struggled to fulfill the rapid uptick in orders.

“In logistics – the infrastructure in Peru is undeveloped,” says Gonzalo Chávez, head of partnerships at Credicorp and board member at e-commerce platform Lumingo. “We need to work together with all the participants in this space. Last mile delivery has been a problem for us, we have seen this in our marketplace.”

Another challenge comes from the shift to contactless payments. In an effort to maintain distance from others, people are buying through mobile checkouts even when they are in a store. This means merchants must cover the higher costs of a card-not-present transaction, when often the customer is right in front of them, notes Peter Hazlehurst, former head of Uber Money.

Special report: Payments & E-Commerce in the Americas: Preparing for the new normal

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