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October 12, 2020
eCommerce is booming across Latin America, but nowhere is it seeing such a surge as in Argentina. With 44.8 million consumers, 93 percent of which have access to the Internet, this is one of the countries where mobile commerce (mCommerce) and eWallets are expected to expand the most worldwide over the next few years.
Argentina’s eCommerce is set to increase 104 percent over the next three years, according to the 2020 Global Payments Report by Worldpay from FIS®. The massive growth is driven by the expansion of mCommerce at a rate of 28 percent annually. The country currently ranks second as the market with the fastest mCommerce growth in the world, just behind Turkey.
Physical distancing during the coronavirus pandemic brought thousands of new customers to online shops and should speed up this incredible market development. With that said, the eCommerce sector is expected to play a bigger part in the country’s economy.
While Argentinians are not shopping the same way as a few years ago, the way they pay is also changing. Like in any other country, Argentina’s customers have their own preferences when it comes to payments. Credit cards remain popular and represent 43 percent of online purchases. Digital wallets are currently 20 percent of the market and are on the rise. Thanks to the success of local eWallets such as Mercado Pago and Todo Pago, they are growing faster in Argentina than in any other market in Latin America. Bank transfers and debit cards are other relevant payment methods in the region.
However, one of the most relevant payment habits in Argentina is the widespread adoption of installment plans. According to the Argentine Chamber of Electronic Commerce, shoppers expect the option of paying up to 12 interest-free installments for high-ticket items like travel and technology, and 3 to 6 installments for everyday purchases like clothing. This preference explains why credit cards are still so popular in the country. Therefore, merchants who aim to have a relevant presence in the country can’t risk the loss of sales they would face if they fail to offer installments.
Worldpay from FIS has recently secured a domestic acquiring license from Visa and Mastercard in Argentina, becoming the largest international provider for acquiring services in the country while offering a reliable and advanced solution. This means that local merchants who process with Worldpay will now be able to trade across borders with the rest of the world through a single point of integration while offering a more seamless payments experience both domestically and abroad.
For international sellers, Worldpay from FIS’ new license in Argentina not only opens doors to gain a faster route to sell to local consumers, but also enables local processing which is more important than ever nowadays. Recently created local taxes on cross border payments make the processing method very expensive and even prohibitive for most consumers with surcharges up to 35 percent of the amount paid.
Global merchants looking to expand their horizons should move now to capitalize on the growth of Argentina’s eCommerce. Working with a partner that can offer the most appropriate payment methods, as well as incomparable processing capabilities, is essential.
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