An overview of the most popular payment methods and how to implement them to your business, so as to reach more customers and increase sales.
What are Payment Methods?
There are numerous in-store and online payment methods. From bank transfers to credit cards, having a range of the most popular payment methods available can help your business attract customers and increase revenue.
The ability to choose from several payment options when buying online is essential for customers. Latin Americans, for example, have a specific purchase behavior, and they prefer to buy from sites that offer different payment methods, besides credit cards.
The most popular Payment Methods in Latin America
According to Research and Market’s report, Latin America Payment Methods 2019, Latin America is a huge e-commerce market with consumers opting for a variety of domestic payment methods. Among the most popular payment methods are the following:
Voucher Payments such as Boleto Bancario
Credit and Debit Cards
Each payment method has its benefits, but having a range of payment methods available for consumers is the key to growing sales in the region.
Overview of Voucher Payments
With a large portion of the population unbanked, many Latin American shoppers are dependent on this popular method to pay for their online purchases. Vouchers are trusted by consumers and allows them to buy online goods and services. The payment can be made online or offline, and it's up to the customer to choose where and when to pay.
No matter their device, customers can download the voucher as a pdf file to pay at lottery stores, at bank branches, at ATMs, in bank apps, or by accessing their internet banking. All necessary information will be mentioned on the voucher, specifying the total amount, the store where it was purchased, and the final due date to complete the payment. It will be processed and, once confirmed, the customer receives a receipt. This payment method is secure and reduces the risk of chargeback.
Overview of Domestic Credit Card Payments
What makes credit card payments so popular is the ability for citizens to make payments for items using instalments. For example, if a customer purchases a television for $2,000, the total amount can be divided into 10 monthly payments of $200 each. This can be particularly beneficial for businesses who sell more expensive items, as it provides customers with a convenient way to pay off large purchases.
Customers who pay for credit card purchases over instalments make up 62% of credit card transactions each year. With the prevalence of instalments among credit card transactions, it’s important that this payment method is available for Latin American customers.
Overview of Bank Transfer
Another common payment method is bank transfer. It allows customers to transfer the amount of purchase to a specific bank account mentioned on the voucher. The payment can be completed at any bank branch or ATM, or via mobile or internet banking.
With bank transfer payments, the customer selects the payment method at the checkout, a voucher that includes payment instructions is generated, and the customer pays for the voucher at any banking institution. It takes one business day for the payment to be confirmed.
How to start accepting different Payment Methods in Latin America
To start offering online payment methods in Latin America the proper systems need to be in place. This attracts more customers to your business, as they have more payment options. For the most popular e-commerce platforms, payment methods can be installed through:
Plugins or Gateways
Generating Payment Links
One of the easiest ways to provide all of the most popular methods of payment in LatAm is through payment platforms. These platforms provide end-to-end payment solutions for all of the payment options available throughout Latin America. This helps businesses ensure they are providing popular methods of payment, continuing to attract customers and increase sales.
Which Payment Method should you accept first?
If you have feedback from your customers about the types of payment methods they need, a good place to start is by choosing which payment method to accept first. Alternatively, you could install an integrated payment platform that allows you to use a range of payment methods, so customers can pick and choose how they pay. Then, after analyzing your results, you may be able to decide which payment methods you will continue to offer.
The main decision you need to make when it comes to online payment methods in Latin America depends on the size of your business and average turnover.
From small businesses to large enterprises, alternative payment platforms integrate with businesses in a range of ways, including platform integration, payment pages, direct API, payment by link, Google Pay, and mobile payments. Integration options across platforms have different costs and benefits, so these need to be weighed in with your business size and structure when making your decision.
While it may seem daunting to offer a range of payment methods in your business, using an end-to-end payment solution will save you time, so you can focus on growing your business.