Some Latin American merchants are struggling to get more US sales approved. Few know that it has to do with their payment processing options.
You operate in the Latin American market. You want to expand to North America and get customers from Canada and the USA. So what solution will help you accept credit card orders over the internet? How do you set up an offshore account if your business is from Latin America?
That’s what we’re going to look at in this the second half of our two-part blog post series on Latin American payment processing.
Our first post in the series highlighted some of the issues affecting high-risk businesses based in LatAm.
In this post, we will discuss the solutions available to expand your business northward.
Why this should matter to Latin American merchants
Yes, you’re operating in the Latin American market. Yes, you’re looking to expand your business overseas, especially to North America.
But you’re also a high-risk Latin American merchant selling products such as supplements, adult entertainment, consumer goods and electronics, etc. Furthermore, you’ve seen how difficult it is to get international credit card sales approved.
The good news is that there are solutions available to grow your business. To expand your market outwards and increase your revenue. Monthly earnings stuck at USD $25,000 will be a memory when you do, and your business starts growing.
To boost US sales you must target the North American market
Have you ever promoted an online product to the US? Have you seen a low rate of sales accepted from that region? It’s not easy to get local transactions from US customers approved.
But, what if your product would do even better overseas? The North American market offers vast opportunities to high-risk businesses. Popular industries are dating, coaching, biz op, marketing services, and health supplements.
So, how do you tap into that market? How do you offer convenient and secure payment processing options? These are serious questions.
North Americans love simple and convenient payment solutions. There are credit cards, ACH transfers, PayPal, e-checks, and other easy-to-use payment methods. And if there is a gap in the industry? These are filled by new solutions like Venmo from PayPal.
But most of these solutions won’t work for you unless you have a payment provider that can work in USD or CAD. They must also have the technology necessary to accommodate those sales. Plus, you need a merchant account that let’s customers pay how they want, whether it be recurring or on a payment plan for larger transactions.
You’re already a risk taker since you’ve started your high-risk business. But it’s time to expand.
Contact DirectPayNet and let’s move you into the North American market with a merchant account catered to your Latin American business.
Enter the North American market as a Latin American merchant
As discussed, there is a high decline rate for sales to North American customers if you’re not accepting the correct payment modes and the correct currencies.
Your products and services are enticing. But you just can’t get the sales approved through your local payment processors.
Also, high-risk merchants can’t use low-risk payment processors like Stripe and PayPal. There are also local options like Kushki, an Ecuadorian Stripe clone. But this still will not allow you to accept international payments.
What options are available for companies with $10,000 orders or large volumes of $50,000 and more a month? The answer is you need a merchant account.
Do what our other clients have done to boost US sales. Get better payment processing like those of high-risk merchants in your industry.
The best way to do that? Get a merchant account that will convert US and Canadian sales without the high decline rates you’re used to when working with your local payment processors.
High-risk merchant accounts the right way
High-risk merchant accounts are ideal for collecting credit card payments from international customers. It is also known as cross-border payment processing. You can get accounts to accept payments from many countries across the world.
Offshore merchant accounts allow all major credit cards from North America. It helps to diversify your international business. You can target more shoppers and keep costs low, as you will continue operating in your home country.
When selling commercial goods or health supplements, ensure you have local shipping options. This reduces delivery time and cost. Choose from several reliable US fulfillment options that accommodate non-US-based businesses.
So, are you a Latin America-based e-commerce merchant? Do you operate in a high-risk category? Do you run an adult entertainment, dating, supplements, high-ticket or luxury goods website? A high-risk merchant account is a no-brainer to convert leads to sales when they come from foreign markets like the US and Canada.
It’s time to start putting Visa, MasterCard, Discover and AMEX logos on your website, as well as debit cards which are very popular with many US customers.
Cryptocurrency options for Latin American merchants
According to Statista, Latin American countries have some of the highest rates of adoption of cryptocurrencies. LatAm countries like Brazil, Columbia, Argentina, Mexico, and Chile all have over 10% adoption rate.
Right now some view Buenos Aires, Argentina as the leading bitcoin city in South America. There are prominent industry players in LatAm. For example, CoinBR and RecargaPay in Brazil, Ripio based in Argentina, and Bitso in Mexico. (You’ll notice that like online payments even virtual currency has no uniformity).
Yes, in many Latin American countries cryptocurrencies are more than solely investments.
As intended they are a means of exchange used to pay for goods and services or transfer money between friends. But even with this wider acceptance, there have been issues with cryptocurrency.
Chilean banks closed the accounts of various prominent crypto-exchanges without warning. Mexico and Chile plan to regulate and protect cryptocurrency exchanges such as CryptoMKT. They will put FinTech laws in place.
Yet, the main issue is acceptance in foreign markets. Cryptocurrency is popular in Latin America. It is not a common payment mechanism in North American. In the US, adoption of cryptocurrency is only at 5%. Canada isn’t even featured in the top 15 countries.
So, crypto is great for the local market, but it is not mainstream across the world. Credit card usage, especially in the US, still rules. That said, many merchants are raking in big money by offering both credit card and cryptocurrency payment options.
Cryptocurrency will help you expand your market locally. But, it can’t be your main payment processor for North American consumers. Visa and MasterCard still account for the majority of online sales in the US and Canada.
Get more international sales approved with an offshore merchant account
At DirectPayNet, our clients operate high-risk businesses. We help them get approved for local and offshore merchant accounts. So, we know what it takes to make this a success. If you’re ready to move into the North American market and accept international cards, then let’s talk.
But first, a quick look at some of the things you need to do:
- Ensure your products can be sold legally in the US (e.g. some supplements contain ingredients that are banned in the US but considered legal elsewhere)
- Establish local shipping options to avoid government customs and delivery delays that increase chargebacks and refunds
- Understand what PCI compliance means and adapt quickly
- Maintain a low chargeback rate (see what chargeback thresholds Visa and MasterCard require for merchant accounts)
- Get a foothold in the target country like more Asian companies are doing
In the past, we have explained the benefits of setting up a business in Canada. Learn more about increasing chances of a Canadian an offshore merchant account here.
You can also get some more valuable tips on offshore merchant accounts in general here.
Getting help to choose a payment processor
Some offshore payment processors for Latin American companies are not as reliable as others. Get a knowledgeable provider to handle your type of business. If you offer products or services that MasterCard and Visa describe as high-risk like dating, health supplements (or other nutraceuticals), business opportunities and coaching, then you need a merchant account.
If not, you could land on a MATCH list, and that is somewhere you never want to be. Read about the dangers of this here.
You have worked hard to build your business. It’s only right that you can expand and get more paying customers. If you’re ready to grow beyond your borders, then let’s talk.
When you’re going to take this step, it is always best to do it right from the start. We can help you identify the right merchant processor for your LatAm-based business.