Reduce LATAM Shopping Cart Abandonment with Local Payment Solutions
According to Statista, Latin America has a cart abandonment rate of 75.3%, which is the third highest after APAC (76.3%) and the Middle East/ Africa (76.1%).
As is the case anywhere in the world, transactions need to be frictionless so that checkout abandonment is reduced and to secure that consumers become repeat purchasers. The Latin American market is no different.
The importance of local payment options
One issue that Latin America faces is the difference in payment methods, due to the region having a very large underbanked population. Estimates put the number as high as 70% – or more than 400 million – in Latin America and the Caribbean, a huge market encompassing billions of dollars in cash and offering big opportunities to those who know how to reach it. This also means that it can be difficult to use e-commerce if the only way to pay is with cash.
As an e-commerce merchant, it may be a complex undertaking if you are new to the region. It requires that you don’t treat each market the same and that you have to support a myriad of different payment options that you don’t know about.
However, what you do know is that you need to think about the customer and understand that limiting a customer’s payment options will result in a higher probability of the shopping cart being abandoned.
When a potential customer is browsing and adding items to the shopping cart, a connection between you, the merchant, and the customer is already in place even before the final transaction has taken place. By providing alternative local payment options you are removing the obstacles, therefore creating advantages for both you and your customers.
When your customer reaches the payment page, the last step, the path is clear. The process is simple, the payment options are familiar and there are no risks.
Conversion to local currencies
In the industry, presenting a customer with the currency used in their home country for everyday purchases is referred to as the presentment currency.
If you are not presenting the prices of your goods or services in local currency, you are ultimately creating uncertainty of the final price to the customer. Having a process whereby customers need to convert prices during their shopping experience is only going to make them become more resistant to your site, which can dramatically increase shopping cart abandonment.
Exchange rate fluctuations is another obstacle faced by not using local currency conversions. Customers become uncertain when they don’t know which exchange rate is going to be applied to them. Expecting a customer to do calculations so that they are not being penalised by using your site is also giving them incentive to abandon the cart. Requiring a customer to pay in a foreign currency also adds to their concern that somewhere along the line there is a hidden fee that will make the price rise.
Removing price uncertainty and eliminating doubt are crucial if you want customers to feel confident and make that final click!
The importance of local payments and the conversion to the local currencies for Latin America should not be under-estimated. Integrating these features assures your customers an environment of trust, familiarity and convenience.
Besides being a company that specializes in Latin America, BoaCompra offers multiple local payment options and currency conversion, therefore allowing you solutions that fit your customers in their markets. This guarantees that shopping carts are not being abandoned for those reasons.