October 30, 2025 • 32 mins
The U.S.-to-LATAM corridor is heating up fast, and the rules of getting paid are changing even faster. We sit down with PPRO’s Therese Hudak to unpack fresh insights from their new Almanac, spotlighting what actually moves the needle for conversion and growth across Brazil, Mexico, Chile, Colombia, Peru, and Argentina. From the meteoric rise of PIX in Brazil to the quiet power of cash vouchers in Mexico, we break down the methods your customers already use and why adopting them can transform your cross-border results.
We explore how real-time bank transfers and digital wallets are overtaking traditional rails, what super app ecosystems like Mercado Pago, Nubank, Rappi, and PicPay mean for reach and retention, and why local acquiring often beats cross-border processing on authorization rates, costs, and customer trust. You’ll hear concrete examples of local-only card schemes, the hidden fees that trigger chargebacks, and practical ways to present clean, transparent pricing that keeps buyers coming back.
We also dive into vertical-specific tactics. Retail remains the growth engine with fashion, electronics, and beauty leading spend, while mobile-first behavior and social commerce reshape discovery and checkout. Gaming and SaaS face unique subscription hurdles as issuers scrutinize merchant-initiated transactions; we share ways to align with LATAM’s installment culture and use wallet flexibility to lift acceptance. To wrap it up, we provide a simple checklist: activate local access, accept the right methods, manage performance - to help you enter, learn, and scale with confidence.
If LATAM is on your roadmap, this conversation gives you the playbook to act now. Visit ppro.com/almanac to learn more.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:01):
Welcome to the Signal, Powered by the Leaders
in Payments podcast, where weare cutting through the noise to
reveal what truly matters inpayments and fintech.
This episode is part of ourSignal series, where we will be
focusing on the cross-borderpayments theme.
Today our special guest isTherese Hudak, the VP Commercial
Americas for PPRO.
(00:21):
Hello everyone, I'm your host,Greg Myers.
Today we will be exploringinsights from the first edition
of PRO's new Almanac CorridorSeries, which focuses on the
U.S.
to Latam Corridor.
This report highlights theexplosive growth of e-commerce
in Latin America, the importanceof local payment methods, and
the opportunities for U.S.
merchants and PSPs looking toexpand into the region.
(00:42):
So, Therese, thank you so muchfor being here and welcome to
the show.
SPEAKER_01 (00:45):
Thank you, Greg.
Thanks for having me.
SPEAKER_00 (00:47):
So before we dive into the meat of the
conversation, can you tell us alittle bit about yourself and
your journey in payments?
SPEAKER_01 (00:53):
Sure.
I've been in payments for quitesome time, for about 20 years.
I started out at a smallpayments company in Stockholm,
Sweden.
Was there for a number of yearsfocusing on local payments,
actually mainly in Europe andLatin America, which is kind of
funny.
I've come full circle around.
It's a lot of what we'refocusing today on with PPRO.
(01:14):
But after that, moved over tothe US and I worked for Digital
River for many years.
And from there, I worked with uhBraintree and PayPal before I
jumped over to PPRO, where I'vebeen for six years now.
And yeah, like you mentioned,I'm heading up the sales and
account management team here inthe US.
So yeah, that's a little bitabout me.
SPEAKER_00 (01:35):
Yeah, thanks for sharing that.
So for those that may not befamiliar with PPRO, can you tell
our audience what PPRO does?
SPEAKER_01 (01:41):
Yes, at a very high level, we help merchants and
payment service providers growtheir business by enabling local
payment methods, whether that bea local payment method in
Europe, like Blick in Poland,for instance, or Wiro, that is
now being rolled out as sort ofone of the main bank trend
(02:02):
payments throughout Europe, orPICs or local cards in Brazil.
We kind of enable one easy wayto access those payment methods.
And then we focus a lot andpride ourselves for kind of
having very high performance andconversion rate.
So that's kind of like a bigfocus for us.
SPEAKER_00 (02:19):
Okay.
Well, let's dive into theinsights from the report.
And just as a reminder toeveryone, we'll have a link in
the show notes to the report.
And as previously mentioned,this is a new almanac and it's
focused on the US to Latamcorridor.
So what was the motivationbehind launching it and why
start with the US to Latamcorridor?
SPEAKER_01 (02:38):
Yeah, good question, Greg.
We I've been with the company,like I said, for six years.
And even joining the company,the one thing that a lot of our
clients and even prospects outthere in the market knew about
PPRO, it was the P Pro PaymentsBible.
Of course, it's sort of not theformal name, but that's sort of
what most people were referringit to as.
(03:00):
And so it's basically like areally thick book that had a lot
of data and insight about themethods.
So we did that for many years,and now we started thinking
about okay, how can we make thisdata easier and more accessible?
So now we're coming out with abrand new version of the Payment
Salman Act, but we're doing it alittle different this time.
(03:21):
We are instead of having a bigchunk of book and cutting down
half the ring for us to producethat, we're making small
booklets with specific corridorsso our merchants and any
payments nerds out there can getaccess to this data in a more
digestible format.
And the way our marketing teamkind of likes to refer to it as
(03:43):
is more of having instead of afeature film, we have kind of a
box set now.
So you can take, you know, thespecific pieces out of it that
you want to view.
And like you said, we'refocusing on this one initial
launch and piece of this box setis the US to Latam corridor.
And the reason why we'refocusing on that is because this
(04:04):
is just such a high growthregion.
You know, we're seeing LatinAmerica, e-commerce in general
growing strong year over year,and it's up to 633 billion US
dollars in 2024.
So it's a very big market, andthe US exports to the top six
(04:24):
Latin American markets exceeded440 billion that same year in
24.
So we already know it's a reallybig market, and it's a it's the
market where a lot of themerchants have saturated, you
know, like the US and lookingelsewhere for growth markets.
This is one that they kind ofare looking at and have in mind.
And especially some of theseother merchants that kind of
(04:47):
like a digital first and sort oflike you don't even need to kind
of penetrate your home market,you just go global right away.
This is one of the markets thatthey are looking at.
And yeah, obviously the figuresin this market reflect, you
know, huge growth in the digitalcommerce in this region.
And yeah, these merchants wantto capitalize on that growth.
(05:08):
So, in addition to the actualsize and growth of market,
obviously the dynamics of thismarket throughout Latin America
create a lot of opportunitiesand challenges when you start
looking at, you know, like,well, how do I actually approach
the market?
And what do I need to thinkabout?
What are some of the mainpayment methods that I need to
(05:30):
offer to be able to capture theconsumers?
That sort of uh is thebackground to what we focused on
here.
And that's why we started withthis report to really address
some of the complexities thatthe merchants face, to
understand sort of how toapproach the market and you know
what to think about in terms ofwho the consumers are, how they
(05:52):
want to pay, so on and so forth.
Yeah.
SPEAKER_00 (05:54):
Okay.
It's a great segue into the nextquestion.
And you talked about this alittle bit, but the report
describes how Latin America isone of the fastest growing
e-commerce markets in the world.
So, what do you think is drivingthat growth?
And why should US merchants bepaying attention now?
SPEAKER_01 (06:11):
Yeah, I think it is that it's that big growth, like
I said.
I mean, 633 billion market.
So it's just one of the biggestones.
And also that consumers in thismarket are really happy to be
paying for things cross-borderin the Almanac.
And this is something that wesort of are monitoring also, is
(06:33):
those cross-border corridors.
So the consumers in the variouscountries in Latam, which
countries are they buying from?
Obviously, they're buying fromtheir local e-commerce retailers
and digital goods merchants, butare they also buying from other
merchants outside of theborders?
And then we see that reallystrong corridor that a lot of
(06:56):
you know, Brazilians, Mexicans,Chileans, etc., are buying from
the US to a very large extent.
There's a strong corridor also,obviously, to other countries,
particularly in Brazil, forinstance, they have a very
strong corridor to China, but inthroughout, particularly the six
biggest markets, so Brazil,Mexico, Chile, Colombia, Peru,
(07:18):
and Argentina, we're seeing thata lot of local consumers want to
buy products and services fromUS-based companies.
So that's really, if you're notthinking about how to access
those consumers and doing it ina nice and elegant way, you
should, right?
And so this is uh sort of ahandy, handy book to be able to
(07:40):
get some insight into what youreally should be thinking about.
SPEAKER_00 (07:43):
Okay.
And you talked about this also,the payment preferences in
Latam, they're evolving quickly.
So can you explain some of thebiggest shifts you've seen and
what's fueling those shifts?
SPEAKER_01 (07:52):
Yeah, no, absolutely.
We see, and I think a lot ofthis also, it was sort of a
perfect storm when uh thepandemic hit.
And at that time, the BrazilianCentral Bank, Brazil obviously
being the largest market inLatin America, had already
started thinking about how wecan build a nice digital way for
(08:14):
consumers to pay, thinking aboutkind of upgrading the means of
paying that they had in themarket today, because they had a
very high degree of unbankedcustomers and people were paying
with payment methods that stillexist today, but very much kind
of like offline and clunky andslow, like Boleto in Brazil, et
cetera.
(08:34):
So they had already startedputting this infrastructure in
place to be able to launch whatwe now know as PICS, which is a
real-time bank transfer togeneral payment methods in
Brazil.
But then what happened is rightwhen they launched this payment
method, COVID hit.
And so a lot of the consumers inthis market then got some relief
(08:54):
payments from the government,kind of as part of what was
happening during the pandemic,and then they needed to get
access to this.
So those various things thathappened that the
government-owned bank Caixa was,you know, giving out cars to
these consumers to be able toget, but but it really drove the
consumers to adopt some of thisnew technology.
(09:15):
So it really kind of acceleratedwhat was happening.
And then I think a lot of theother countries in Latin
America, you know, like paidattention to what was happening
in Brazil.
So this have had a really nicetrickle effect in a lot of
different markets throughoutLatin America and what's being
built, you know, both by theindividual central banks and
(09:36):
other third parties that are,you know, wanting to jump on the
bank wagon.
But so what we've seen then issort of like these bank
transfers and digital wallets inLatin America, seeing very high
growth rates year on year.
So bank transfers we're seeing30% year on year between 24 and
27, and digital wallets 19%.
(09:59):
So it's really high growth forthese specific types of ways of
paying online and in person aswell, in many cases.
And then peaks, like Imentioned, that the Brazilian
Central Bank came out with, theytoday represent 45% of all
payments, and they're you know,right about now, probably
surpassing credit cards inBrazil.
(10:22):
So it's a huge shift, right?
From it's like night and daygoing back just only five years.
So what we're seeing overall nowis that digital wallets are set
to be the top form of paymentsfor e-commerce across Argentina,
Chile, Colombia, and Mexico by2030.
So it's huge growth there.
So I guess in summary, you know,it's it's just the data shows
(10:46):
that it's a shift away fromtraditional methods to more
digital, modern ways of paying.
SPEAKER_00 (10:52):
Yeah, it's fascinating that any payment
method in the world could beadopted from zero to 45% in only
five years.
Like companies would go crazyfor that in the US, right?
If that could ever happen.
So it's fascinating.
And I think the real-time aspectof it, COVID hitting and all
that, and you know, all thatdigital stuff happening.
But the report also highlightsthe role of cash-based payment
(11:15):
methods.
So even in this digital world,so why are those cash methods
still so critical in this regionthat's moving towards this
digital stuff that you weretalking about?
SPEAKER_01 (11:24):
Yeah, no, it's a it's a good question.
And even though we sort of tendto talk about Latam in broad
strokes sometimes, we need tolook at, you know, country by
country.
And Mexico is one of thosecountries that has a little bit
of a different dynamic, and theydo still have a lot of unbanked
consumers and you know, adultpopulation, basically.
(11:46):
So what the numbers that we havethat are most recent is that
about 48% of Mexicans areunbanked, and that is huge,
right?
So, from an e-commerceperspective, cash options are
key depending on sort of likewhat demographic what consumers
you're really trying to goafter.
(12:08):
So if you don't have a bankaccount or a bank card or a
credit card, then you have toenable something like OXO or OXO
Pay to be able to capture thoseunbanked consumers.
And it's kind of interestingbecause in Mexico, I think what
we see is still a very highlevel of adults that are
(12:31):
purchasing online and want topurchase online.
But what we're seeing is that ifyou look at even some of the big
name brands that are focusing onMexico and have local uh
e-commerce storefronts, stilldon't have that cash option in
the checkout.
So I think it's a hugeopportunity for US companies
(12:51):
here, you know, just by adding apayment method to be able to
penetrate this market in a moreefficient way.
So I think Mexico is a hugeopportunity for US merchants.
SPEAKER_00 (13:03):
Okay.
Well, the Almanac also mentionssuper app ecosystems as a key
area of development in Latam.
So maybe this is kind of athree-part question, I guess.
So maybe define what a super appecosystem is.
And then how does it shape thepayments experience for
consumers and how does it shapeit for and create opportunities
for merchants?
SPEAKER_01 (13:23):
Yeah, that's a good question.
And I think when most people, ifyou know what a super app is and
a concept, I think most of ustend to think about the Asian
super apps that's available, youknow, because we've seen a huge
success for GRAB and GrabPay inSoutheast Asia, as well as
(13:46):
Alipay in China, and severalmore that exist in the APAC
market.
And these super app has justbecome a really ubiquitous tool
for consumers in this marketbecause not only is it a tool to
pay, it's sort of there's otherfactors you can lend.
There's buying out paid lateropportunities, you can use it to
(14:08):
for write hailing, to call kindof what we use here, obviously,
like an Uber.
It's a similar concept, butwithin that app in APAC, and
it's sort of increasing thedigital financial inclusion in
general, right?
And then it could be fooddelivery included in the app and
package delivery.
So there's so many things thatwe've seen in APAC.
(14:30):
Now, this is sort of then cominginto Latam and kind of a
growing, some of these sameaspects, but we're seeing
Mercado Pago, which is a walletthat's been around for quite
some time in Latam, born inArgentina, but now available
throughout Latam, adding somemore features that are sort of
generally part of uh the superapps.
(14:52):
We're seeing New Bank, which is,you know, one of the world's
largest neobanks and growingleaps and bounds in Brazil, but
also now in Mexico and goinginto several other markets.
We're seeing Rappi and PicPay.
So there's several initiativesthat are sort of coming at this
from slightly differentdirections and adding more
(15:13):
features into their apps to beable to better serve consumers
in so many ways and be able togive consumers the easiest way
of paying and the easiest wayfor merchants also kind of to
interact with their consumers,right?
In more ways than one.
So it kind of creates thisecosystem that really becomes
(15:33):
very sticky, both for theconsumer and for the merchant.
So I'm really kind of curiousover the next few years to see
how these particular companiesand more are gonna kind of take
advantage of you know some ofthese opportunities to really
become a nice service for theseconsumers in Latin America.
SPEAKER_00 (15:51):
Yeah, definitely will be an interesting trend to
watch over time and see how wellthey can build critical mass for
those.
You know, this next question issomething that I think a lot of
companies struggle with.
So I'm curious to talk aboutthis, but there's a clear
distinction between local andinternational cards in that
region.
So, what does that mean for U.S.
(16:12):
merchants that are looking toexpand?
How do they decide which ones tointegrate with?
You know, which are the localcard schemes they should pay
attention to?
I think that's a challenge thata lot of merchants have.
So uh curious your thoughts onthat.
SPEAKER_01 (16:24):
Yes, Greg, so some of these local cards that
consumers are using in variouscountries in Latin America
aren't simply enabled forinternational purchases.
And you know, many times theseconsumers, when they are buying
online, they are quite not evenaware of if they're buying from
a local merchant or aninternational merchant, right?
(16:46):
And so if they're buying from aninternational merchant, meaning
that they, that merchant doesn'thave local entity in a way that
they're able to acquire thattransactions locally, then the
issuing bank will see that,okay, here's the local consumer
with the local cards beingacquired to an acquire that is
(17:08):
cross-border.
And when they see thatcombination, they will
automatically decline thatbecause they suspect that it's a
higher level of fraud typicallywhen they see those combinations
and will just straight outdecline those transactions.
So from a consumer, you don'tmaybe know what's going on
underneath, right?
All they know is that, hey, Iwasn't able to purchase with my
(17:29):
card.
So that's not a very niceexperience for that local
consumer.
And in many cases, that localconsumer can actually call their
bank up and even in some casesgo to their local bank out and
just kind of, oh, enable my cardfor an international purchase.
But you might even know thatyou're able to do that or be
savvy enough to be able to dothat, right?
(17:50):
So that's why like a lot ofthese transactions are simply
declined.
And there are, to your point,also some specific brands
outside of just Visa Most cardas well.
And some of those are ELO inBrazil, Carnette in Mexico, and
Aranja and Argentina.
So there are some of these localcard brands that they simply
can't be acquired cross-border.
(18:11):
You have to have local acquiringenabled to be able to take
payments from the users of thoseissued cards.
But also in those cases wheresome of the card branded cards
can be accepted, even in thosecases, there could be some
challenges with those cardsbecause, for one, it's more
(18:31):
expensive to acquire thosecards, and sometimes those fees
kind of get pushed over to theactual consumer and the card
holder.
There is higher FX, sometimes 5%FX, and in some cases there are
also higher taxes.
So the consumer can see maybe upto 8% additional cost on top of
what they already bought for.
(18:52):
And you know, as a consumer,you'll be like, why am I paying
more here?
And you know, you don't evenrealize who is actually taking
that piece of the money, right?
Thinking oftentimes maybe it'sthe merchant, and then that can
lead to maybe a chargeback beingissued because the consumer is
very unhappy.
And it's kind of interestingalso because there's different
sort of uh consumer experiencewhen it comes to this.
(19:13):
Sometimes all these fees mightbe baked into the actual fee
that the consumer noticing, andsometimes it just sits as a
separate line item on your cardstatement as consumer, and
that's then it's like obvious,like someone is charging me
extra for something here, andyou know, whether I'm happy with
that or not, you know, like butwe do see a higher level of kind
of chargebacks due to that theseextra fees are sometimes on
(19:36):
there.
So what we're seeing is that 29%of the cards in the region are
not enabled for international oroverseas transactions.
So just something to keep inmind that, you know, that's kind
of one of the drivers for atleast evaluate, you know, should
I be processing these types oftransactions locally, you know,
(19:56):
to enhance that customerexperience and be able to get
higher authorization rates?
SPEAKER_00 (20:02):
Okay.
Well, let's talk about some ofthe verticals.
So retail, gaming, and SaaSstand out in the report as high
growth verticals.
So which of these sectors do youthink holds the most untapped
potential and why?
SPEAKER_01 (20:13):
It's hard to say exactly which one because I feel
like the different types ofvertical have different sort of
opportunities and differentapproaches on how they kind of
enter the Latin American market.
But what we do see is thatretail is a huge sector when it
comes to LATAM.
Latam is the fastest growingregion for online retail around
(20:36):
the world.
So if you're a retailer in theUS, you should be paying
attention, right?
You're probably already seeingto some extent, you know, a
consumer wanting to buy yourgoods if you have that enabled
for, you know, like consumersoutside of the US.
And retail accounts for 50% oftotal e-commerce spending, as it
is the top growth sector.
And what we're seeingspecifically is fashion,
(20:58):
electronics, and beauty andpersonal care, the highest
segments that are generating thehighest revenue.
And the highest growth is withinelectronics, which we're
expecting to exceed 65 billionof US dollars in volume in the
coming years.
And it especially from a retailperspective, if you're a retail
(21:22):
merchant, Mexico, like we talkeda little bit about earlier, is
kind of one of those regionsthat really has a lot of
opportunity.
Because retail is very importantin this market.
Consumers are buying a lot ofretail online, and that's about
75% of online sale is retail inMexico.
(21:42):
What you can read in the Almanacis that TikTok launched its
TikTok shop in Mexico at thebeginning of this year, enabling
buyers to purchase directly inthe app, and that's driving a
lot of purchases.
So that's been a huge success.
And what we're also seeing thenis that the way that the local
consumers in Mexico areinteracting with this retailer
(22:04):
and a lot of other retailers isvia the mobile device.
So 78% is of the onlinetransactions is via mobile.
So it's also another thing topay attention to if you go in as
a retailer in Mexico, and it'strue for Latam overall, to
really optimize that interfacein the mobile device.
SPEAKER_00 (22:23):
The SaaS market in Latam is growing faster than
basically anywhere else.
So, how do you see paymentinnovation supporting that
trajectory?
SPEAKER_01 (22:32):
It's a good question because when it comes to SaaS,
SaaS tend to have a little bitof a different business model,
clearly than to retail, right?
But also to a lot of otherverticals out there.
A lot of SaaS companies haveadopted a subscription model,
and that we're very used to thatin the US, right?
We I don't know, I don't know,Greg, how many subscriptions are
(22:53):
you paying for a month?
It's like it's a lot.
And so we're so used to that.
And obviously, like it kind ofwas uh an American model to
start with.
Obviously, like over in Europe,it it's kind of also ambiguous
now, and obviously in LatinAmerica, like of course, you
know, you're watching Netflix inmost of these markets now, so
also kind of used to thesubscription model.
(23:16):
But I think from a bankingperspective is what we're seeing
that they still kind of declinea lot of these transactions,
also, because of course, whenyou're signing up the first
purchase, or you know, if you'reputting your card on file, put
in your CVD code of your creditcard, but then of course, a lot
of those transactions that arecoming after that is going to be
the merchant-initiatedtransactions, and you might not
(23:37):
see that CVD code.
And then, unless that issuingbank's kind of fully aware of
what those transactions are andare aware of kind of like what
company it is and what businesswallet it is, they might see
that as a higher risk and youknow, declining that to a higher
degree.
And that's what we have seen,you know, in the past with some
of our merchants.
(23:57):
So really kind of requires likea really good dialogue and kind
of keep educating these localissuing banks so that they are
aware what the transactionsthese are, and understanding
that some of these potentialquestions that are coming from
consumers, you know, like howyou respond to that and how you
redirect those, and alsounderstanding that, you know,
(24:17):
there could be some friendlyfraud and understanding what
kind of fraud that is, and youknow, is that something that can
be prevented and how you canprevent that?
But basically, you know, likehow innovation comes into this.
I think there's variousinnovative ways that are being
developed in the market to beable to have payment methods
that consumers can use or kindof like really nicely works with
(24:41):
some of these models.
In Latin America, the way ofpaying with a card have often
been that you pay for somethingwhen you go into, you know, a
brick and mortar and buy a pairof shoes.
So if you're in Brazil, Greg andyou go into a shoe store and buy
some shoes, for instance, theywill ask you, okay, how many
months do you want to pay offthose shoes on?
And you'll be like, wait aminute, they never ask me this
(25:02):
when I go into, you know, likeNordstrom in the in the US.
And so that's kind of trickledover, right, to how consumers
are interacting with purchasesonline.
So even with something like SaaScompanies and subscriptions, you
can kind of turn this on itshead and say, like, okay, I have
an annual fee that you've got topay, but you can pay those off
in instalments as opposed to,you know, the traditional way of
(25:24):
having a subscription.
And that way is sort of likeyou're working with uh how the
actual market works from a froma perspective from how you pay,
right?
And then I think there's a lotof other companies that are
taking this and building a niceinterface around that.
For instance, New Pay, which isnew banks payment methods that
(25:44):
they've launched into market,they are really thinking about
okay, how can each of ourmerchants really make sure that
they capture the payments andhow can our consumers really pay
in the way that they want topay?
So, within the wallet of NewPay, you can pay in like three
different ways.
You can pay directly from yourbank account to the bank, or you
can pay with your debit card andthen add installments on top of
(26:07):
that, or as a third option, is abuy now paid later option.
So that way, so they've kind oflike try to innovate to be able
to make it work for bothmerchants to be able to get the
money without having to havethat transaction decline from a
consumer.
It gives them more options onreally how they want to pay,
right?
And with New Bank being aneobank, they've obviously
(26:29):
opened up more for thoseconsumers that maybe couldn't
really get a financialinstrument or a bank card or a
credit card with some of themore established banks.
So I think it's sort of openingup for more consumers to come
into the market and interact ina very nice way with the brands
that they want to interact andbuy from.
SPEAKER_00 (26:49):
Okay.
Well, the report ends with apayments checklist.
If you could distill it down,what are the top two or three
steps that US merchants and PSPshould prioritize first?
SPEAKER_01 (27:00):
Sure.
So what we've done in ourchecklist is dividing it up in
kind of what we call activate,accept, and manage.
So first, obviously, you need toenter the market and be able to
set things up so that you couldget access to the market, right?
And part of that is to get thelocal access to the local
(27:20):
consumers.
And we've touched upon this alittle bit, but the question is
do you need a local entity toaccess those?
Do you have a local entity?
Is that something that you wantto do?
Or do you want to partner withsomeone to accept payments?
There are the options of that weoffer at PPRO, and there's you
know other partners out there aswell that have what we call the
(27:41):
merchant of record solution sothat you can go local in the
country but partner with uh apartner like PPRO, you know, for
that local entity to give youaccess to appear exactly as
you're processing thattransaction locally and get the
optimal auth rates and capturethose consumers, but then get
get the settlement to you knowthe preferred entity outside of
(28:05):
Blacktown.
Also thinking about thecompliance piece, do you
understand the local schemerules and the compliance
requirements?
And from the funds flow andsettlement perspective, how can
you prepare for FX volatilityand kind of cross-border
remittance risks?
So these are all questions, youknow, you need to think about
(28:26):
when you're going in andaccessing the market and then
kind of activating, you know,and then actually being able to
process as well.
So we have kind of a lot ofquestions and the checklist in
the end of the new Almanac thatwe've come out with.
SPEAKER_00 (28:40):
Okay.
Well, looking forward, what doyou see as the biggest
opportunities and the biggestchallenges for merchants that'll
want to enter the Latam market,say in the next three to five
years?
SPEAKER_01 (28:49):
A couple of things.
I think the the market isbecoming more diverse in how you
pay.
I feel like, you know, evenpre-COVID, you know, there used
to be maybe one, a couple ofways of paying in each of these
markets throughout the LatinAmerican countries.
And now it's becoming sodiverse.
You know, it's a combination ofthe various banks in the market,
(29:13):
central banks, but also theother established banks that are
coming out with new paymentmethods and small brands and
wallets that are kind ofgrowing.
So it's becoming really kind ofyeah, just diverse market in
terms of payment methods.
And it's going to be interestingto see sort of which ones take
the large shares.
But PICS is coming out as aclear winner, right?
(29:34):
And then the other countries areeither, you know, thinking about
accepting PICs or something PICSlike, you know, to be able to
have that real time acceptanceof payments.
So I think what's happening inBrazil is really trickling down
to the other markets.
So I think that's a realopportunity for the merchants,
(29:55):
you know, because it's becomingeasier and you can get the funds
much quicker.
You know, than it traditionallyhave been able to get in the
Latin American market.
So I think there's a lot ofopportunities of streamlining
payments with a lot of optionsthat are out there, you know,
and platforms like P Pro kind ofstreamlining how you get access
(30:15):
to the local market and alsoleveraging, by now pay later,
and installments, like we talkedabout, you know, also to, you
know, make your product and orservice affordable to the local
consumers.
And still, you know, I thinkthere's also challenges when it
comes to both maybe like tax andregulation and things like that.
(30:36):
But we're also obviously overthe last few years seeing a lot
of of those challenges beingstreamlined.
You know, Brazil, for instance,wanting to have more investments
and trying to open up a littlebit more for those investments.
For instance, you know, we'reseeing a central bank establish
what we call the EFX, EFX marketso that you can easier be able
(30:59):
to process locally.
It was very tricky before interms of kind of what
withholding tax you have to payin the market.
And now that the tax structurehas been somewhat streamlined.
And, you know, it's going to beinteresting to see what the
other central banks do in theother market to see by
streamlining tax management,too, for instance, right?
(31:20):
But yeah, but that's somethingto kind of look into or utilize
a partner to be able to managethat.
SPEAKER_00 (31:27):
Okay.
Well, Theresa, this has been agreat discussion.
Any final thoughts before wewrap up the show?
SPEAKER_01 (31:32):
I think we talked a lot about the Almanac today.
And so yeah, just want to makeeverybody aware that this is
something we just launched.
It's available on our webpage atpepro.com slash almanac.
So we'll also have a link at theshow notes.
But uh yeah, just happy that wehave this brand new piece of uh
(31:53):
content for everybody.
Uh a lot of my merchants havebeen been asking for it for some
time.
So glad to finally have it outin the market.
SPEAKER_00 (32:01):
Great.
Well, Therese, thank you so muchfor being on the show today.
I know your time is veryvaluable, so I really appreciate
you being here today.
SPEAKER_01 (32:07):
Thanks so much, Greg.
Thanks for hosting me.
SPEAKER_00 (32:09):
Absolutely.
And to all you listeners outthere, I thank you for your time
as well.
And until the next story,
Welcome to the Signal, Powered by the Leaders
in Payments podcast, where weare cutting through the noise to
reveal what truly matters inpayments and fintech.
This episode is part of ourSignal series, where we will be
focusing on the cross-borderpayments theme.
Today our special guest isTherese Hudak, the VP Commercial
Americas for PPRO.
(00:21):
Hello everyone, I'm your host,Greg Myers.
Today we will be exploringinsights from the first edition
of PRO's new Almanac CorridorSeries, which focuses on the
U.S.
to Latam Corridor.
This report highlights theexplosive growth of e-commerce
in Latin America, the importanceof local payment methods, and
the opportunities for U.S.
merchants and PSPs looking toexpand into the region.
(00:42):
So, Therese, thank you so muchfor being here and welcome to
the show.
SPEAKER_01 (00:45):
Thank you, Greg.
Thanks for having me.
SPEAKER_00 (00:47):
So before we dive into the meat of the
conversation, can you tell us alittle bit about yourself and
your journey in payments?
SPEAKER_01 (00:53):
Sure.
I've been in payments for quitesome time, for about 20 years.
I started out at a smallpayments company in Stockholm,
Sweden.
Was there for a number of yearsfocusing on local payments,
actually mainly in Europe andLatin America, which is kind of
funny.
I've come full circle around.
It's a lot of what we'refocusing today on with PPRO.
(01:14):
But after that, moved over tothe US and I worked for Digital
River for many years.
And from there, I worked with uhBraintree and PayPal before I
jumped over to PPRO, where I'vebeen for six years now.
And yeah, like you mentioned,I'm heading up the sales and
account management team here inthe US.
So yeah, that's a little bitabout me.
SPEAKER_00 (01:35):
Yeah, thanks for sharing that.
So for those that may not befamiliar with PPRO, can you tell
our audience what PPRO does?
SPEAKER_01 (01:41):
Yes, at a very high level, we help merchants and
payment service providers growtheir business by enabling local
payment methods, whether that bea local payment method in
Europe, like Blick in Poland,for instance, or Wiro, that is
now being rolled out as sort ofone of the main bank trend
(02:02):
payments throughout Europe, orPICs or local cards in Brazil.
We kind of enable one easy wayto access those payment methods.
And then we focus a lot andpride ourselves for kind of
having very high performance andconversion rate.
So that's kind of like a bigfocus for us.
SPEAKER_00 (02:19):
Okay.
Well, let's dive into theinsights from the report.
And just as a reminder toeveryone, we'll have a link in
the show notes to the report.
And as previously mentioned,this is a new almanac and it's
focused on the US to Latamcorridor.
So what was the motivationbehind launching it and why
start with the US to Latamcorridor?
SPEAKER_01 (02:38):
Yeah, good question, Greg.
We I've been with the company,like I said, for six years.
And even joining the company,the one thing that a lot of our
clients and even prospects outthere in the market knew about
PPRO, it was the P Pro PaymentsBible.
Of course, it's sort of not theformal name, but that's sort of
what most people were referringit to as.
(03:00):
And so it's basically like areally thick book that had a lot
of data and insight about themethods.
So we did that for many years,and now we started thinking
about okay, how can we make thisdata easier and more accessible?
So now we're coming out with abrand new version of the Payment
Salman Act, but we're doing it alittle different this time.
(03:21):
We are instead of having a bigchunk of book and cutting down
half the ring for us to producethat, we're making small
booklets with specific corridorsso our merchants and any
payments nerds out there can getaccess to this data in a more
digestible format.
And the way our marketing teamkind of likes to refer to it as
(03:43):
is more of having instead of afeature film, we have kind of a
box set now.
So you can take, you know, thespecific pieces out of it that
you want to view.
And like you said, we'refocusing on this one initial
launch and piece of this box setis the US to Latam corridor.
And the reason why we'refocusing on that is because this
(04:04):
is just such a high growthregion.
You know, we're seeing LatinAmerica, e-commerce in general
growing strong year over year,and it's up to 633 billion US
dollars in 2024.
So it's a very big market, andthe US exports to the top six
(04:24):
Latin American markets exceeded440 billion that same year in
24.
So we already know it's a reallybig market, and it's a it's the
market where a lot of themerchants have saturated, you
know, like the US and lookingelsewhere for growth markets.
This is one that they kind ofare looking at and have in mind.
And especially some of theseother merchants that kind of
(04:47):
like a digital first and sort oflike you don't even need to kind
of penetrate your home market,you just go global right away.
This is one of the markets thatthey are looking at.
And yeah, obviously the figuresin this market reflect, you
know, huge growth in the digitalcommerce in this region.
And yeah, these merchants wantto capitalize on that growth.
(05:08):
So, in addition to the actualsize and growth of market,
obviously the dynamics of thismarket throughout Latin America
create a lot of opportunitiesand challenges when you start
looking at, you know, like,well, how do I actually approach
the market?
And what do I need to thinkabout?
What are some of the mainpayment methods that I need to
(05:30):
offer to be able to capture theconsumers?
That sort of uh is thebackground to what we focused on
here.
And that's why we started withthis report to really address
some of the complexities thatthe merchants face, to
understand sort of how toapproach the market and you know
what to think about in terms ofwho the consumers are, how they
(05:52):
want to pay, so on and so forth.
Yeah.
SPEAKER_00 (05:54):
Okay.
It's a great segue into the nextquestion.
And you talked about this alittle bit, but the report
describes how Latin America isone of the fastest growing
e-commerce markets in the world.
So, what do you think is drivingthat growth?
And why should US merchants bepaying attention now?
SPEAKER_01 (06:11):
Yeah, I think it is that it's that big growth, like
I said.
I mean, 633 billion market.
So it's just one of the biggestones.
And also that consumers in thismarket are really happy to be
paying for things cross-borderin the Almanac.
And this is something that wesort of are monitoring also, is
(06:33):
those cross-border corridors.
So the consumers in the variouscountries in Latam, which
countries are they buying from?
Obviously, they're buying fromtheir local e-commerce retailers
and digital goods merchants, butare they also buying from other
merchants outside of theborders?
And then we see that reallystrong corridor that a lot of
(06:56):
you know, Brazilians, Mexicans,Chileans, etc., are buying from
the US to a very large extent.
There's a strong corridor also,obviously, to other countries,
particularly in Brazil, forinstance, they have a very
strong corridor to China, but inthroughout, particularly the six
biggest markets, so Brazil,Mexico, Chile, Colombia, Peru,
(07:18):
and Argentina, we're seeing thata lot of local consumers want to
buy products and services fromUS-based companies.
So that's really, if you're notthinking about how to access
those consumers and doing it ina nice and elegant way, you
should, right?
And so this is uh sort of ahandy, handy book to be able to
(07:40):
get some insight into what youreally should be thinking about.
SPEAKER_00 (07:43):
Okay.
And you talked about this also,the payment preferences in
Latam, they're evolving quickly.
So can you explain some of thebiggest shifts you've seen and
what's fueling those shifts?
SPEAKER_01 (07:52):
Yeah, no, absolutely.
We see, and I think a lot ofthis also, it was sort of a
perfect storm when uh thepandemic hit.
And at that time, the BrazilianCentral Bank, Brazil obviously
being the largest market inLatin America, had already
started thinking about how wecan build a nice digital way for
(08:14):
consumers to pay, thinking aboutkind of upgrading the means of
paying that they had in themarket today, because they had a
very high degree of unbankedcustomers and people were paying
with payment methods that stillexist today, but very much kind
of like offline and clunky andslow, like Boleto in Brazil, et
cetera.
(08:34):
So they had already startedputting this infrastructure in
place to be able to launch whatwe now know as PICS, which is a
real-time bank transfer togeneral payment methods in
Brazil.
But then what happened is rightwhen they launched this payment
method, COVID hit.
And so a lot of the consumers inthis market then got some relief
(08:54):
payments from the government,kind of as part of what was
happening during the pandemic,and then they needed to get
access to this.
So those various things thathappened that the
government-owned bank Caixa was,you know, giving out cars to
these consumers to be able toget, but but it really drove the
consumers to adopt some of thisnew technology.
(09:15):
So it really kind of acceleratedwhat was happening.
And then I think a lot of theother countries in Latin
America, you know, like paidattention to what was happening
in Brazil.
So this have had a really nicetrickle effect in a lot of
different markets throughoutLatin America and what's being
built, you know, both by theindividual central banks and
(09:36):
other third parties that are,you know, wanting to jump on the
bank wagon.
But so what we've seen then issort of like these bank
transfers and digital wallets inLatin America, seeing very high
growth rates year on year.
So bank transfers we're seeing30% year on year between 24 and
27, and digital wallets 19%.
(09:59):
So it's really high growth forthese specific types of ways of
paying online and in person aswell, in many cases.
And then peaks, like Imentioned, that the Brazilian
Central Bank came out with, theytoday represent 45% of all
payments, and they're you know,right about now, probably
surpassing credit cards inBrazil.
(10:22):
So it's a huge shift, right?
From it's like night and daygoing back just only five years.
So what we're seeing overall nowis that digital wallets are set
to be the top form of paymentsfor e-commerce across Argentina,
Chile, Colombia, and Mexico by2030.
So it's huge growth there.
So I guess in summary, you know,it's it's just the data shows
(10:46):
that it's a shift away fromtraditional methods to more
digital, modern ways of paying.
SPEAKER_00 (10:52):
Yeah, it's fascinating that any payment
method in the world could beadopted from zero to 45% in only
five years.
Like companies would go crazyfor that in the US, right?
If that could ever happen.
So it's fascinating.
And I think the real-time aspectof it, COVID hitting and all
that, and you know, all thatdigital stuff happening.
But the report also highlightsthe role of cash-based payment
(11:15):
methods.
So even in this digital world,so why are those cash methods
still so critical in this regionthat's moving towards this
digital stuff that you weretalking about?
SPEAKER_01 (11:24):
Yeah, no, it's a it's a good question.
And even though we sort of tendto talk about Latam in broad
strokes sometimes, we need tolook at, you know, country by
country.
And Mexico is one of thosecountries that has a little bit
of a different dynamic, and theydo still have a lot of unbanked
consumers and you know, adultpopulation, basically.
(11:46):
So what the numbers that we havethat are most recent is that
about 48% of Mexicans areunbanked, and that is huge,
right?
So, from an e-commerceperspective, cash options are
key depending on sort of likewhat demographic what consumers
you're really trying to goafter.
(12:08):
So if you don't have a bankaccount or a bank card or a
credit card, then you have toenable something like OXO or OXO
Pay to be able to capture thoseunbanked consumers.
And it's kind of interestingbecause in Mexico, I think what
we see is still a very highlevel of adults that are
(12:31):
purchasing online and want topurchase online.
But what we're seeing is that ifyou look at even some of the big
name brands that are focusing onMexico and have local uh
e-commerce storefronts, stilldon't have that cash option in
the checkout.
So I think it's a hugeopportunity for US companies
(12:51):
here, you know, just by adding apayment method to be able to
penetrate this market in a moreefficient way.
So I think Mexico is a hugeopportunity for US merchants.
SPEAKER_00 (13:03):
Okay.
Well, the Almanac also mentionssuper app ecosystems as a key
area of development in Latam.
So maybe this is kind of athree-part question, I guess.
So maybe define what a super appecosystem is.
And then how does it shape thepayments experience for
consumers and how does it shapeit for and create opportunities
for merchants?
SPEAKER_01 (13:23):
Yeah, that's a good question.
And I think when most people, ifyou know what a super app is and
a concept, I think most of ustend to think about the Asian
super apps that's available, youknow, because we've seen a huge
success for GRAB and GrabPay inSoutheast Asia, as well as
(13:46):
Alipay in China, and severalmore that exist in the APAC
market.
And these super app has justbecome a really ubiquitous tool
for consumers in this marketbecause not only is it a tool to
pay, it's sort of there's otherfactors you can lend.
There's buying out paid lateropportunities, you can use it to
(14:08):
for write hailing, to call kindof what we use here, obviously,
like an Uber.
It's a similar concept, butwithin that app in APAC, and
it's sort of increasing thedigital financial inclusion in
general, right?
And then it could be fooddelivery included in the app and
package delivery.
So there's so many things thatwe've seen in APAC.
(14:30):
Now, this is sort of then cominginto Latam and kind of a
growing, some of these sameaspects, but we're seeing
Mercado Pago, which is a walletthat's been around for quite
some time in Latam, born inArgentina, but now available
throughout Latam, adding somemore features that are sort of
generally part of uh the superapps.
(14:52):
We're seeing New Bank, which is,you know, one of the world's
largest neobanks and growingleaps and bounds in Brazil, but
also now in Mexico and goinginto several other markets.
We're seeing Rappi and PicPay.
So there's several initiativesthat are sort of coming at this
from slightly differentdirections and adding more
(15:13):
features into their apps to beable to better serve consumers
in so many ways and be able togive consumers the easiest way
of paying and the easiest wayfor merchants also kind of to
interact with their consumers,right?
In more ways than one.
So it kind of creates thisecosystem that really becomes
(15:33):
very sticky, both for theconsumer and for the merchant.
So I'm really kind of curiousover the next few years to see
how these particular companiesand more are gonna kind of take
advantage of you know some ofthese opportunities to really
become a nice service for theseconsumers in Latin America.
SPEAKER_00 (15:51):
Yeah, definitely will be an interesting trend to
watch over time and see how wellthey can build critical mass for
those.
You know, this next question issomething that I think a lot of
companies struggle with.
So I'm curious to talk aboutthis, but there's a clear
distinction between local andinternational cards in that
region.
So, what does that mean for U.S.
(16:12):
merchants that are looking toexpand?
How do they decide which ones tointegrate with?
You know, which are the localcard schemes they should pay
attention to?
I think that's a challenge thata lot of merchants have.
So uh curious your thoughts onthat.
SPEAKER_01 (16:24):
Yes, Greg, so some of these local cards that
consumers are using in variouscountries in Latin America
aren't simply enabled forinternational purchases.
And you know, many times theseconsumers, when they are buying
online, they are quite not evenaware of if they're buying from
a local merchant or aninternational merchant, right?
(16:46):
And so if they're buying from aninternational merchant, meaning
that they, that merchant doesn'thave local entity in a way that
they're able to acquire thattransactions locally, then the
issuing bank will see that,okay, here's the local consumer
with the local cards beingacquired to an acquire that is
(17:08):
cross-border.
And when they see thatcombination, they will
automatically decline thatbecause they suspect that it's a
higher level of fraud typicallywhen they see those combinations
and will just straight outdecline those transactions.
So from a consumer, you don'tmaybe know what's going on
underneath, right?
All they know is that, hey, Iwasn't able to purchase with my
(17:29):
card.
So that's not a very niceexperience for that local
consumer.
And in many cases, that localconsumer can actually call their
bank up and even in some casesgo to their local bank out and
just kind of, oh, enable my cardfor an international purchase.
But you might even know thatyou're able to do that or be
savvy enough to be able to dothat, right?
(17:50):
So that's why like a lot ofthese transactions are simply
declined.
And there are, to your point,also some specific brands
outside of just Visa Most cardas well.
And some of those are ELO inBrazil, Carnette in Mexico, and
Aranja and Argentina.
So there are some of these localcard brands that they simply
can't be acquired cross-border.
(18:11):
You have to have local acquiringenabled to be able to take
payments from the users of thoseissued cards.
But also in those cases wheresome of the card branded cards
can be accepted, even in thosecases, there could be some
challenges with those cardsbecause, for one, it's more
(18:31):
expensive to acquire thosecards, and sometimes those fees
kind of get pushed over to theactual consumer and the card
holder.
There is higher FX, sometimes 5%FX, and in some cases there are
also higher taxes.
So the consumer can see maybe upto 8% additional cost on top of
what they already bought for.
(18:52):
And you know, as a consumer,you'll be like, why am I paying
more here?
And you know, you don't evenrealize who is actually taking
that piece of the money, right?
Thinking oftentimes maybe it'sthe merchant, and then that can
lead to maybe a chargeback beingissued because the consumer is
very unhappy.
And it's kind of interestingalso because there's different
sort of uh consumer experiencewhen it comes to this.
(19:13):
Sometimes all these fees mightbe baked into the actual fee
that the consumer noticing, andsometimes it just sits as a
separate line item on your cardstatement as consumer, and
that's then it's like obvious,like someone is charging me
extra for something here, andyou know, whether I'm happy with
that or not, you know, like butwe do see a higher level of kind
of chargebacks due to that theseextra fees are sometimes on
(19:36):
there.
So what we're seeing is that 29%of the cards in the region are
not enabled for international oroverseas transactions.
So just something to keep inmind that, you know, that's kind
of one of the drivers for atleast evaluate, you know, should
I be processing these types oftransactions locally, you know,
(19:56):
to enhance that customerexperience and be able to get
higher authorization rates?
SPEAKER_00 (20:02):
Okay.
Well, let's talk about some ofthe verticals.
So retail, gaming, and SaaSstand out in the report as high
growth verticals.
So which of these sectors do youthink holds the most untapped
potential and why?
SPEAKER_01 (20:13):
It's hard to say exactly which one because I feel
like the different types ofvertical have different sort of
opportunities and differentapproaches on how they kind of
enter the Latin American market.
But what we do see is thatretail is a huge sector when it
comes to LATAM.
Latam is the fastest growingregion for online retail around
(20:36):
the world.
So if you're a retailer in theUS, you should be paying
attention, right?
You're probably already seeingto some extent, you know, a
consumer wanting to buy yourgoods if you have that enabled
for, you know, like consumersoutside of the US.
And retail accounts for 50% oftotal e-commerce spending, as it
is the top growth sector.
And what we're seeingspecifically is fashion,
(20:58):
electronics, and beauty andpersonal care, the highest
segments that are generating thehighest revenue.
And the highest growth is withinelectronics, which we're
expecting to exceed 65 billionof US dollars in volume in the
coming years.
And it especially from a retailperspective, if you're a retail
(21:22):
merchant, Mexico, like we talkeda little bit about earlier, is
kind of one of those regionsthat really has a lot of
opportunity.
Because retail is very importantin this market.
Consumers are buying a lot ofretail online, and that's about
75% of online sale is retail inMexico.
(21:42):
What you can read in the Almanacis that TikTok launched its
TikTok shop in Mexico at thebeginning of this year, enabling
buyers to purchase directly inthe app, and that's driving a
lot of purchases.
So that's been a huge success.
And what we're also seeing thenis that the way that the local
consumers in Mexico areinteracting with this retailer
(22:04):
and a lot of other retailers isvia the mobile device.
So 78% is of the onlinetransactions is via mobile.
So it's also another thing topay attention to if you go in as
a retailer in Mexico, and it'strue for Latam overall, to
really optimize that interfacein the mobile device.
SPEAKER_00 (22:23):
The SaaS market in Latam is growing faster than
basically anywhere else.
So, how do you see paymentinnovation supporting that
trajectory?
SPEAKER_01 (22:32):
It's a good question because when it comes to SaaS,
SaaS tend to have a little bitof a different business model,
clearly than to retail, right?
But also to a lot of otherverticals out there.
A lot of SaaS companies haveadopted a subscription model,
and that we're very used to thatin the US, right?
We I don't know, I don't know,Greg, how many subscriptions are
(22:53):
you paying for a month?
It's like it's a lot.
And so we're so used to that.
And obviously, like it kind ofwas uh an American model to
start with.
Obviously, like over in Europe,it it's kind of also ambiguous
now, and obviously in LatinAmerica, like of course, you
know, you're watching Netflix inmost of these markets now, so
also kind of used to thesubscription model.
(23:16):
But I think from a bankingperspective is what we're seeing
that they still kind of declinea lot of these transactions,
also, because of course, whenyou're signing up the first
purchase, or you know, if you'reputting your card on file, put
in your CVD code of your creditcard, but then of course, a lot
of those transactions that arecoming after that is going to be
the merchant-initiatedtransactions, and you might not
(23:37):
see that CVD code.
And then, unless that issuingbank's kind of fully aware of
what those transactions are andare aware of kind of like what
company it is and what businesswallet it is, they might see
that as a higher risk and youknow, declining that to a higher
degree.
And that's what we have seen,you know, in the past with some
of our merchants.
(23:57):
So really kind of requires likea really good dialogue and kind
of keep educating these localissuing banks so that they are
aware what the transactionsthese are, and understanding
that some of these potentialquestions that are coming from
consumers, you know, like howyou respond to that and how you
redirect those, and alsounderstanding that, you know,
(24:17):
there could be some friendlyfraud and understanding what
kind of fraud that is, and youknow, is that something that can
be prevented and how you canprevent that?
But basically, you know, likehow innovation comes into this.
I think there's variousinnovative ways that are being
developed in the market to beable to have payment methods
that consumers can use or kindof like really nicely works with
(24:41):
some of these models.
In Latin America, the way ofpaying with a card have often
been that you pay for somethingwhen you go into, you know, a
brick and mortar and buy a pairof shoes.
So if you're in Brazil, Greg andyou go into a shoe store and buy
some shoes, for instance, theywill ask you, okay, how many
months do you want to pay offthose shoes on?
And you'll be like, wait aminute, they never ask me this
(25:02):
when I go into, you know, likeNordstrom in the in the US.
And so that's kind of trickledover, right, to how consumers
are interacting with purchasesonline.
So even with something like SaaScompanies and subscriptions, you
can kind of turn this on itshead and say, like, okay, I have
an annual fee that you've got topay, but you can pay those off
in instalments as opposed to,you know, the traditional way of
(25:24):
having a subscription.
And that way is sort of likeyou're working with uh how the
actual market works from a froma perspective from how you pay,
right?
And then I think there's a lotof other companies that are
taking this and building a niceinterface around that.
For instance, New Pay, which isnew banks payment methods that
(25:44):
they've launched into market,they are really thinking about
okay, how can each of ourmerchants really make sure that
they capture the payments andhow can our consumers really pay
in the way that they want topay?
So, within the wallet of NewPay, you can pay in like three
different ways.
You can pay directly from yourbank account to the bank, or you
can pay with your debit card andthen add installments on top of
(26:07):
that, or as a third option, is abuy now paid later option.
So that way, so they've kind oflike try to innovate to be able
to make it work for bothmerchants to be able to get the
money without having to havethat transaction decline from a
consumer.
It gives them more options onreally how they want to pay,
right?
And with New Bank being aneobank, they've obviously
(26:29):
opened up more for thoseconsumers that maybe couldn't
really get a financialinstrument or a bank card or a
credit card with some of themore established banks.
So I think it's sort of openingup for more consumers to come
into the market and interact ina very nice way with the brands
that they want to interact andbuy from.
SPEAKER_00 (26:49):
Okay.
Well, the report ends with apayments checklist.
If you could distill it down,what are the top two or three
steps that US merchants and PSPshould prioritize first?
SPEAKER_01 (27:00):
Sure.
So what we've done in ourchecklist is dividing it up in
kind of what we call activate,accept, and manage.
So first, obviously, you need toenter the market and be able to
set things up so that you couldget access to the market, right?
And part of that is to get thelocal access to the local
(27:20):
consumers.
And we've touched upon this alittle bit, but the question is
do you need a local entity toaccess those?
Do you have a local entity?
Is that something that you wantto do?
Or do you want to partner withsomeone to accept payments?
There are the options of that weoffer at PPRO, and there's you
know other partners out there aswell that have what we call the
(27:41):
merchant of record solution sothat you can go local in the
country but partner with uh apartner like PPRO, you know, for
that local entity to give youaccess to appear exactly as
you're processing thattransaction locally and get the
optimal auth rates and capturethose consumers, but then get
get the settlement to you knowthe preferred entity outside of
(28:05):
Blacktown.
Also thinking about thecompliance piece, do you
understand the local schemerules and the compliance
requirements?
And from the funds flow andsettlement perspective, how can
you prepare for FX volatilityand kind of cross-border
remittance risks?
So these are all questions, youknow, you need to think about
(28:26):
when you're going in andaccessing the market and then
kind of activating, you know,and then actually being able to
process as well.
So we have kind of a lot ofquestions and the checklist in
the end of the new Almanac thatwe've come out with.
SPEAKER_00 (28:40):
Okay.
Well, looking forward, what doyou see as the biggest
opportunities and the biggestchallenges for merchants that'll
want to enter the Latam market,say in the next three to five
years?
SPEAKER_01 (28:49):
A couple of things.
I think the the market isbecoming more diverse in how you
pay.
I feel like, you know, evenpre-COVID, you know, there used
to be maybe one, a couple ofways of paying in each of these
markets throughout the LatinAmerican countries.
And now it's becoming sodiverse.
You know, it's a combination ofthe various banks in the market,
(29:13):
central banks, but also theother established banks that are
coming out with new paymentmethods and small brands and
wallets that are kind ofgrowing.
So it's becoming really kind ofyeah, just diverse market in
terms of payment methods.
And it's going to be interestingto see sort of which ones take
the large shares.
But PICS is coming out as aclear winner, right?
(29:34):
And then the other countries areeither, you know, thinking about
accepting PICs or something PICSlike, you know, to be able to
have that real time acceptanceof payments.
So I think what's happening inBrazil is really trickling down
to the other markets.
So I think that's a realopportunity for the merchants,
(29:55):
you know, because it's becomingeasier and you can get the funds
much quicker.
You know, than it traditionallyhave been able to get in the
Latin American market.
So I think there's a lot ofopportunities of streamlining
payments with a lot of optionsthat are out there, you know,
and platforms like P Pro kind ofstreamlining how you get access
(30:15):
to the local market and alsoleveraging, by now pay later,
and installments, like we talkedabout, you know, also to, you
know, make your product and orservice affordable to the local
consumers.
And still, you know, I thinkthere's also challenges when it
comes to both maybe like tax andregulation and things like that.
(30:36):
But we're also obviously overthe last few years seeing a lot
of of those challenges beingstreamlined.
You know, Brazil, for instance,wanting to have more investments
and trying to open up a littlebit more for those investments.
For instance, you know, we'reseeing a central bank establish
what we call the EFX, EFX marketso that you can easier be able
(30:59):
to process locally.
It was very tricky before interms of kind of what
withholding tax you have to payin the market.
And now that the tax structurehas been somewhat streamlined.
And, you know, it's going to beinteresting to see what the
other central banks do in theother market to see by
streamlining tax management,too, for instance, right?
(31:20):
But yeah, but that's somethingto kind of look into or utilize
a partner to be able to managethat.
SPEAKER_00 (31:27):
Okay.
Well, Theresa, this has been agreat discussion.
Any final thoughts before wewrap up the show?
SPEAKER_01 (31:32):
I think we talked a lot about the Almanac today.
And so yeah, just want to makeeverybody aware that this is
something we just launched.
It's available on our webpage atpepro.com slash almanac.
So we'll also have a link at theshow notes.
But uh yeah, just happy that wehave this brand new piece of uh
(31:53):
content for everybody.
Uh a lot of my merchants havebeen been asking for it for some
time.
So glad to finally have it outin the market.
SPEAKER_00 (32:01):
Great.
Well, Therese, thank you so muchfor being on the show today.
I know your time is veryvaluable, so I really appreciate
you being here today.
SPEAKER_01 (32:07):
Thanks so much, Greg.
Thanks for hosting me.
SPEAKER_00 (32:09):
Absolutely.
And to all you listeners outthere, I thank you for your time
as well.
And until the next story,
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