Subscription Services and Payment Preferences in LATAM

November 11, 2022 • Jose Leon, Managing Director, Latin America

The Insight

For services like SVODs to acquire and retain Latin American subscribers, they must ensure their ability to bill recurring payments aligns with local realities.

The Data

Unlike other world regions, accepting only credit cards won’t achieve optimal results in LATAM, where credit cards don’t have the same consumer penetration. Payment methods like debit cards, prepaid cards, and digital wallets are growing in market share. For example:

  • In Brazil 16% of subscription payments are now made through PIX (a digital alternative to traditional banking)
  • In Peru, debit cards account for nearly 50% of all recurring payments
  • Digital wallets take a 21% share of the payments space in Mexico. PayPal is the most popular option, but domestic player Mercado Pago, Visa Checkout and Masterpass are also popular digital wallet options.

Diving deeper into the data: while credit cards dominate the Mexican e-commerce payments space with 47% of all transactions, debit cards have much stronger uptake than credit cards. There are 0.99 debit cards in circulation per capita, compared with 0.19 credit cards.

Our Approach

When expanding into LATAM territories, we work with our clients to consider payment options at the local level, and implement processes to maximize acquisition and mitigate failed transactions.

  • Local preferences vary by territory. Consider supporting country-specific payment methods as well as pan-regional and global payment options.
  • When establishing billing cycles, especially for customers using debit cards, take standard paydays into consideration to limit failed transactions.
  • Process transactions in local currency whenever possible.
  • Avoid processing recurring transactions in the early morning hours as many processors perform system maintenance overnight. Instead, attempt charges in the early business hours of the day, always considering local time zones.

Sources: Ebanx, Americas Market Intelligence, JP Morgan

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