Latin America: A Rising Opportunity for International Payment Service Providers and Large Merchants

As global e-commerce thrives, many international markets are witnessing diminishing returns due to high competition and saturation. In contrast, Latin America (LATAM) represents a burgeoning opportunity for Payment Service Providers (PSPs). With digital commerce expanding at an impressive 20% annually, with consumers across LATAM increasingly embracing digital payment methods. The region is forecasted to reach nearly $950 billion in online purchases by 2026, with international transactions accounting for a significant share. Vertical segments like, gambling and gaming are poised to grow at a compound annual growth rate (CAGR) of more than 18% by 2028, presenting a lucrative landscape/playground for PSP's.

Challenges of a Direct Go-to-Market Strategy in LATAM

While the potential is vast, entering and expanding across Latin America poses unique challenges for International PSPs and clients aiming to navigate the market independently.

Fragmented Legal and Regulatory Environment

Each country in Latin America has distinct legislation governing business operations, tax codes, and the legality of various sectors, such as sports betting and casinos. Compliance with these diverse regulations is daunting and can significantly delay a PSP independently tackling each country in turn impacting their return on investment.

Complex Bank Relationships and Integrations

Setting up local business entities and contracting with regional banks involves navigating bureaucratic hurdles, legacy technology platforms, and sub-standard support. PSP’s must integrate with multiple systems, often outdated and complex, requiring significant effort from development teams.

Multiple Payment Gateways and APMs

PSPs must partner with numerous local and alternative payment method (APM) operators to allow customers—including the unbanked and underbanked—to transact using their preferred methods. Establishing legal entities, coding, testing, and certifying disparate systems makes it challenging to launch a competitive platform that supports all preferred payment methods.

Cross-Border Processing Costs

Transactions not processed in local currencies often decline due to higher perceived risk. Plus, cross-border transactions are 4-5 times more expensive than local ones, adding friction and cost. Not offering popular APMs can significantly impede revenue generation.

Security and Risk Management

Dealing with multiple banks and processors leads to inconsistent risk management and increased fraud. It also complicates PCI DSS compliance, making it harder for PSPs to ensure secure transactions and maintain visibility into decline reasons and chargebacks.

Kushki: The Key to Success Across LATAM

• Simplifying LATAM Expansion for PSPs

Kushki offers a streamlined solution for PSPs looking to capitalize on Latin America’s growth potential without incurring the associated complexities and costs. Our extensive LATAM presence, licensing, connectivity, risk adeptness, and experience make us uniquely qualified to be the partner PSPs everywhere trust to enter the region, grow and scale their business, and meet their customers' evolving payment demands.

• Deep Local Payment Expertise

Kushki's extensive local presence across LATAM and its licensing, connectivity, and expertise make it an ideal partner for PSPs. By connecting PSPs to multiple LATAM countries via a single API, Kushki simplifies pay-ins, pay-outs, and advanced fraud management for various payment methods; including cards, bank transfers, digital wallets, subscriptions, and installments.

• Reduced Costs and Complexities

With Kushki, PSPs can reduce operational costs and complexities by consolidating multiple acquiring relationships into one under our non-bank acquiring licenses with Visa and Mastercard. This unified approach streamlines regional acquiring, offering consistent underwriting, risk management, transaction routing, and support.

• Streamlined Integration and Faster Market Entry

Kushki's universal platform facilitates seamless integration and last-mile connectivity to over 80 card networks, banks, and local/alternative payment methods (LPMs/APMs) across five countries. One relationship supported by a single API speeds time to market and allows PSPs to scale efficiently across the region without the overhead of establishing legal entities in each country.

• Enhanced Transaction Processing

Kushki improves transaction processing by combining global and local capabilities. In-country processing reduces declined transactions, enhances authorization rates, and accelerates funding. Sophisticated fraud tools and detailed insights into transaction data further optimize performance.

• Superior Customer Experience

Kushki enhances the customer experience by offering a wide array of payment types, including credit cards, installments, subscriptions, and digital wallets. PSPs can provide their clients with the payment flexibility they demand—backed by friendly and knowledgeable local support teams—fostering deeper customer relationships and increasing lifetime value.

How Kushki Helps PSPs Unlock Success and Scale?

Kushki supplies the technology and operational resources so PSPs can concentrate on doing what they love without getting mired in the overhead of card schemes, local laws, payment methods, and banking bureaucracy. By expanding confidently, PSPs can maximize revenue and grow their business, even entering untapped markets and vertical segments.

PSPs can trust that their processing is safe and secure and backed by a financially solid, and proven company with an entrepreneurial spirit dedicated to driving the digital payments revolution in Latin America.

In 2023, Kushki processed 140 million transactions in cards, transfers, cash—valued at US$15 billion.

Kushki’s unique positioning and extensive capabilities make it the key to unlocking LATAM's payment opportunities. It enables PSPs to act locally while thinking globally. Whether navigating the regulatory landscape, integrating multiple payment methods, or managing risk, Kushki provides the support and resources PSPs need to thrive in Latin America.

Ready to grow with Kushki in Latin America? Talk to us today.