This feature was originally published in issue 33 of SBC Leaders magazine.
Payment Expert Editor Ted Orme-Claye writes about the importance of Pix in Brazil and Latin America’s growing acceptance of digital payment methods
In a continent as diverse in nations, cultures and economies as Latin America, betting operators need a strong understanding of local market conditions to thrive. Operators have a myriad of factors to consider, including regulatory frameworks, technological and financial foundations, and customer preferences.
The first factor to consider is the ever-evolving digital landscape. Latin America is an extremely varied region when it comes to the makeup of its various economies, and how consumers across its various borders spend their money.
In Brazil, there is one word operators need to familiarise themselves with – Pix. Managed by the Central Bank of Brazil, Pix stands out as one of the biggest success stories in global finance.
In the four years since its launch in 2020, Pix has overtaken debit and credit cards as Brazil’s most popular payment method and counts tens of millions of users. As one operator told Payment Expert earlier this year, “the level of familiarity with that payment method is sky high”.
This makes Brazil unique as one of the world’s most rapidly digitised payments ecosystems. Operators in Brazil will be required to use Pix as a payment method, not just due to consumer preference, but also because its use is mandated in the government’s regulation.
The bottom line is, if you want to accept payments, build your brand and customer base in Brazil, you will need to use Pix. Digitalisation has similarly taken hold in other prominent markets such as Argentina and Colombia, where digital wallets are increasingly becoming the norm.
Other countries do not share this level of digitalisation. A one-size-all-approach will not accomplish anything. Compare Brazil with Peru, for example – the former is one of the best examples of digital payments, while the latter is much more traditional.
Peruvian betting – until recently – has been largely dominated by retail. Operators looking at this market should be prepared for a very different scenario to Brazil, one where large volumes of smaller cash transactions still play a role.
On the other hand, Peru has also recently joined the global wave of online gaming, with new regulations coming into effect. Smartphone penetration and internet access are also rising, and so operators should prepare for a shift in market dynamics over the coming years.
For operators coming into Latin America from more established markets, particularly Europe and North America, some significant differences in payments preferences will likely be encountered.
Operators may find that Latin American customers are much more receptive to alternative payment methods and digital wallets than in Europe and North America, where the long dominant methods of debit cards and bank transfers remain popular.
In addition, Latin America may prove to be a new frontier regarding cryptocurrency, although the full potential of this will depend on how regulations of betting and crypto evolve over the coming years. The governments of El Salvador and Argentina are perhaps the most receptive to cryptocurrency.
Latin America is undoubtedly the next frontier in global gaming, with the US gold rush now wrapping up and firms looking for new opportunities. These opportunities can be found in spadefuls in Brazil, Colombia, Peru, Chile and Argentina, among others – but operators need to make sure that payments knowledge is on point.
