Broadly speaking And the diverse land between Patagonia and the Rio Grande, a region entrepreneurs and investors like to call “LatAm,” has 38 different countries using 39 different currencies.
Only 19% of Latin American adults own a credit card, and 70% of credit cards cannot be used globally in Brazil, Argentina and Chile. Local payment methods account for 68% of online sales, and depending on the region and merchant networks, merchants must integrate dozens of payment service providers. Meanwhile, cash voucher systems such as Brazil’s Boleto Bancario and Mexico’s Oxxo payment network account for a large share of Latin American consumer transactions.
Fraud is also a major problem for online merchants in Latin America. Since the outbreak began, Stripe has observed that fraud rates at businesses in Latin America are 97 percent higher than in North America and 222 percent higher than at businesses in the Asia Pacific.
In a few words: The payment landscape in Latin America seems hopelessly fragmented and riddled with fraud.
The solution must bring together multiple providers and data sources into a single decision engine to help prevent payment fraud.
Meanwhile, the rapid failure of one-click checkout startups and questions about Bolt’s revenue suggest payment orchestration will continue in the US with the likes of Showify and Stripe. Bolt and Fast wanted to bring Amazon’s one-click experience to all online sellers. After all, 75% of shopping carts are abandoned before checkout, thanks in part to lengthy checkout processes.
But they do manage existing distribution sites like Stripe and Adyen, and can easily extend the one-click solution. Meanwhile, checkout-only startups suffer from thin margins due to payment defaults on vertically integrated solutions, as well as “incentive wars” between payments, BNPL and checkout players.
So while one-click checkout startups exist in the single-currency, highly digitized and concentrated US market, it may seem impossible for a payment orchestration startup to succeed in Latin America’s fragmented markets.