For payment orchestration startups LatAm, market fragmentation is a blessing in disguise TechCrunch

In the vast and varied land between Patagonia and the Rio Grande, a region that entrepreneurs and investors like to call “LatAm”, there are 38 different countries using 39 different currencies.

Only 19% of Latin American adults have a credit card, and 70% of credit cards in Brazil, Argentina and Chile cannot be used internationally. Local payment methods represent 68% of online sales and, depending on the region and merchant network, merchants must integrate dozens of payment service providers. Meanwhile, voucher systems like the boleto bancário in Brazil and the Oxxo payment network in Mexico account for a significant share of Latin American consumer transactions.

Fraud is also a major problem for online merchants in Latin America. Since the start of the pandemic, Stripe has observed that fraud rates among businesses in Latin America are 97% higher than in North America and 222% higher than businesses in Asia-Pacific.

In a nutshell: the Latin American payments landscape seems hopelessly fragmented and riddled with fraud.

To help prevent payment fraud, a solution should consolidate multiple vendors and data sources into a single decision engine.

Meanwhile, the failure of one-click payment startup Fast and questions over Bolt’s revenue suggest US payments orchestration will remain dominated by Shopify and Stripe. Bolt and Fast wanted to bring Amazon’s one-click experience to all online sellers. After all, 75% of carts are abandoned before checkout, thanks in part to lengthy checkout processes.

But incumbents like Stripe and Adyen already dominate distribution channels, and they can easily expand a one-click solution. Meanwhile, the low margins of payments-only startups are suffering from the vertically integrated solutions of payment incumbents, as well as the “incentive wars” that payments, BNPL and checkout players are waging against price-sensitive merchants. .

So if one-click payment startups are struggling to make progress against incumbents in the highly digitized and concentrated single-currency US market, it may seem impossible for a payments orchestration startup to succeed in the fragmented markets. from Latin America.

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