Making an online purchase is an exercise of trust, access, and social context that just a couple of years ago was not a common exercise for the Latin American population. Being attentive to Black Friday in the US, buying tickets for mega concerts, and even shoes are part of this phenomenon that, according to several experts, is the new profile of the region. A decade ago, eCommerce grew 42.8% in Latin America and the Caribbean, surpassing the $43 billion mark, close to double the amount recorded in the region a couple of years earlier. Jason Simon, an expert on all things eCommerce, explains how digital wallets are changing the landscape.
The popularity of digital wallets is growing in Latin America as well as around the globe. Although this payment method is relatively new in Latin America, there are key factors that have made digital wallets a popular choice for Latin American consumers.
Easy access to mobile Internet and the rise of online shopping, especially now, when the region is still feeling the effects of the social isolation caused by the COVID-19 pandemic, are driving people to look for new online payment methods that are secure and easy. In addition, digital wallets can function as an alternative to the traditional financial system, as they do not require a bank account to use.
“Digital wallets are growing daily, as they offer security, speed, and convenience to customers and merchants alike,” Simon says. “Now, more than ever is the right time to embrace this form of payment.”
All of these factors mean that there is a sea change in this area, and companies have been busy honing a concept linked to this boom in online transactions that is not yet fully incorporated. Digital wallets are online payment services created to replace the use of credit or debit cards and manage accounts or purchases on the web.
To be better understood, instead of carrying one, two, or three credit cards in your wallet, having keys and codes for each of them, and needing to enter them manually when making any kind of purchase on the Internet, it is enough to have a username and password previously associated to the service and everything will be faster and easier.
Another important and increasingly frequent element are the wallets that work through NFC or RFID associated with a telephone, wireless communication services with which it is enough to bring the device close to the sensor in charge of the payment to have an easy and fast transaction. And a third definition that can be given is that which refers to platforms for buying or paying bills via mobile telephony without being associated with a bank, by means of text messages, or applied to the customer’s monthly bill.
“There is still a considerable percentage of transactions in the world that are still done in cash. Less than 50% of the world moves electronically. This, coupled with the fact that there are more people in the world with cell phones than with clean water or electricity, made several start-ups realize that if they wanted to attack this remaining percentage of the cash market, they would have to go mobile,” asserts Simon.
A clear example of this is EBANX, one of the pioneers in offering digital wallets to large companies. The platform provides localized solutions that enable selling in Latin America, such as payment processing, payment methods, partner connectivity, fraud prevention, market expertise, compliance, and regulation, making a real difference to how businesses could thrive in the region.
With a single integration, merchants access all available digital wallets. The entire transaction takes place on the digital wallet page, securely and easily for customers, who can make the purchase in an environment they are familiar with, with a payment method that confirms the transaction in real-time for both merchants and customers.