Jason Simon demonstrates how global payments and eCommerce continue to gain ground

The pandemic has driven greater trust in digital payments and eCommerce in Latin America, leading to an increase in transactions, but also a number of disruptions and new challenges, according to a recent report. The “gulf of mistrust” surrounding digital payments and eCommerce has been overcome in recent months, leading to a huge increase in the use of digital payments and eCommerce. But with growth has also emerged a new set of challenges and difficulties. Jason Simon, an expert in eCommerce and FinTech activity, discusses the global payment space and how it is evolving alongside eCommerce.

Driven by the pandemic, the online shopping and payments ecosystem has accelerated and users have quickly adapted to new shopping and payment models. “As more and more people use services like Rappi and realize they are safe to use, word spreads,” explains Simon. “I think we’ve crossed the abyss of mistrust. That has created this huge acceleration in a short space of time.”

Digital payments companies are also experiencing rapid growth in transactions. Transaction levels have increased and have been growing since last year.

While the pandemic has generated acceptance in the use of digital commerce in Latin America, new challenges also arise. Payment transaction volumes are lower, new logistical hurdles have appeared, and there is a new risk landscape for digital commerce.

Payments for services accomplished in two days could now be delivered in five days or two weeks. Industries that are selling services in advance, such as hotels for when the quarantine ends, or airlines, are offering flexible terms. That extended delivery time is changing the overall risk profile. As the pandemic pushed the world into a delivery economy, Latin American eCommerce platforms, including regional giant Mercado Libre, struggled to meet the rapid rise in orders.

“In logistical terms, the infrastructure in many countries is not developed,” says Simon. “We need to work together with everyone in this space. Hand deliveries have been a problem for us and we have seen it in our market.”

Another challenge comes from contactless payments. By keeping their distance from others, people make purchases through their mobiles even when they are in a physical store. This means retailers must cover the higher costs of a card-free transaction present, when often the customer is right in front of them, according to Peter Hazlehurst, former head of Uber Money.

eCommerce involves accepting digital payments online and using payment solution providers to process them, while also including the full customer experience and delivery of the product or service. Accepting digital payments can make a big difference for organizations, helping them reach domestic and international customers who prefer the convenience of transacting online or via mobile devices. The prospect of moving to an online digital payments system may seem daunting to many SMBs, and it doesn’t really have to be.

However, 29% of small physical businesses still don’t have an eCommerce website, according to the results of a recent study. eCommerce involves accepting digital payments online and using payment solution providers to process them while also including the full customer experience and delivery of the product or service.

Accepting digital payments can make a big difference for organizations, helping them reach domestic and international customers who prefer the convenience of transacting online or via mobile devices. The prospect of moving to an online digital payments system may seem daunting to many SMEs, and it doesn’t really have to be. Today, customers expect more choices than ever before, not just in terms of products and services. The consumer expects to be able to pay online and find a wide range of options, and those businesses that embrace this idea are the ones that will achieve greater success.

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