In the U.S., you pay for everything with a credit card. Some people don’t like to carry any cash so even when buying a $1.20 king size Heath bar at CVS, they pull out their credit card. However, there are still parts of the world where people don’t have a bank account, let alone a credit card. There are also those who have a bank account and a credit card but are distrustful of online transactions.

In Brazil, more than half of its population has access to the internet — this rate continues to grow at 7 percent every year. Of them, 87 percent of users belong to at least one social network. It’s the 10th largest ecommerce market in the world with $18.8 billion projected sales (excluding travel related products and services) in 2015 — an increase of over 20 percent from 2014. Yet, research conducted by E-bit, indicates that only 4 out of 10 Brazilians shopped on international ecommerce sites in November and December of 2014. Why? Many Brazilians don’t have credit cards and the few that do can’t shop on international ecommerce sites with their local credit cards. Others just don’t feel comfortable sharing their bank account details directly on global websites. Nevertheless, they enjoy online shopping. And really, who doesn’t? Whether you want to buy the NBA2K16 or those cute fall boots you’ve been eying, you can avoid the long lines and the Saturday morning crowds by shopping online. The cherry on top? In Latin America, foreign websites are favored since they will likely offer more competitive prices, consumers can access products that are unavailable in the country, or items that have yet to be released can be purchased early.

However, international e-commerce sites are missing an enormous chunk of this target population because of the limited forms of payments they offer. By adopting regional forms of payments, they can access untapped target markets. Vendors can expand their reach in previously inaccessible areas and drastically widen their customer base. In turn, shoppers have a greater variety of merchants and products to select from.

In addition to ecommerce, SaaS (Software as a Service) companies are also missing huge target market. As a predominantly B2B industry, it is hard to reach businesses that don’t have international credit cards. In many cases, the owner or an executive will use a personal credit card for business purposes and will later be reimbursed by the finance department. This is an inefficient method because not only is it time consuming, it can also create disruptions during reoccurring payments for both customers and merchants.

In Brazil, the largest economy in LATAM, the Boleto Bancário is the most popular alternative payment method. It is a purchase slip similar to an invoice that can be paid at local authorized supermarkets, drugstores, post offices or online. So the 15 year old Justin Bieber fan girl can subscribe to premium music and pay the boleto at a local store. In 2013, more than 2 billion transactions were conducted through Boleto Bancário. Webshoppers Research data shows that it is the fastest growing method among international merchants in Brazil.

Credit cards are popular in the U.S. because of the need to build a good credit score. However, that concept isn’t widespread in LATAM. But paying in installments is extremely entrenched in this culture. So another popular payment method in Brazil is local credit cards. By saving money each month, they can pay for more expensive products over a period of time. Therefore, the Bieber fan girl’s mom can buy her an iPod on AliExpress with her local credit card and pay it with installments.

By allowing regional payment methods, a company can boost its sales and broaden its target audience substantially. The expanded target market can include those too young to have their own credit card, those too distrustful of processing through international methods, and those who just prefer more traditional form of payments like cash.

How can your international business offer local payment methods?

Foreign ecommerce attempting to enter the Brazilian or LATAM market will have a smoother transition by partnering with a local expert. EBANX, a global financial group with Brazilian DNA, enables consumers to purchase online from merchants around the world using their preferred local payment methods. As a leader in cross-border payment processing for e-commerce merchants selling to LATAM, we provide the simplest and most tax efficient business model. EBANX can help your understand and process payments in Latin America.

Want to know more about our solutions? Get in touch!

[email protected] | EBANX