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Leaders In Payments
Leaders In Payments
THE SIGNAL: U.S. to LATAM — PPRO’s Cross-Border Advantage
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.
Welcome to the Signal, Powered by the Leaders in Payments podcast, where we are cutting through the noise to reveal what truly matters in payments and fintech. This episode is part of our Signal series, where we will be focusing on the cross-border payments theme. Today our special guest is Therese Hudak, the VP Commercial Americas for PPRO. Hello everyone, I'm your host, Greg Myers. Today we will be exploring insights from the first edition of PRO's new Almanac Corridor Series, which focuses on the U.S. to Latam Corridor. This report highlights the explosive growth of e-commerce in Latin America, the importance of local payment methods, and the opportunities for U.S. merchants and PSPs looking to expand into the region. So, Therese, thank you so much for being here and welcome to the show.
SPEAKER_01:Thank you, Greg. Thanks for having me.
SPEAKER_00:So before we dive into the meat of the conversation, can you tell us a little bit about yourself and your journey in payments?
SPEAKER_01:Sure. I've been in payments for quite some time, for about 20 years. I started out at a small payments company in Stockholm, Sweden. Was there for a number of years focusing on local payments, actually mainly in Europe and Latin America, which is kind of funny. I've come full circle around. It's a lot of what we're focusing today on with PPRO. But after that, moved over to the US and I worked for Digital River for many years. And from there, I worked with uh Braintree and PayPal before I jumped over to PPRO, where I've been for six years now. And yeah, like you mentioned, I'm heading up the sales and account management team here in the US. So yeah, that's a little bit about me.
SPEAKER_00:Yeah, thanks for sharing that. So for those that may not be familiar with PPRO, can you tell our audience what PPRO does?
SPEAKER_01:Yes, at a very high level, we help merchants and payment service providers grow their business by enabling local payment methods, whether that be a local payment method in Europe, like Blick in Poland, for instance, or Wiro, that is now being rolled out as sort of one of the main bank trend payments throughout Europe, or PICs or local cards in Brazil. We kind of enable one easy way to access those payment methods. And then we focus a lot and pride ourselves for kind of having very high performance and conversion rate. So that's kind of like a big focus for us.
SPEAKER_00:Okay. Well, let's dive into the insights from the report. And just as a reminder to everyone, 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 Latam corridor. So what was the motivation behind launching it and why start with the US to Latam corridor?
SPEAKER_01: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 out there in the market knew about PPRO, it was the P Pro Payments Bible. Of course, it's sort of not the formal name, but that's sort of what most people were referring it to as. And so it's basically like a really thick book that had a lot of data and insight about the methods. So we did that for many years, and now we started thinking about okay, how can we make this data easier and more accessible? So now we're coming out with a brand new version of the Payment Salman Act, but we're doing it a little different this time. We are instead of having a big chunk of book and cutting down half the ring for us to produce that, we're making small booklets with specific corridors so our merchants and any payments nerds out there can get access to this data in a more digestible format. And the way our marketing team kind of likes to refer to it as is more of having instead of a feature film, we have kind of a box set now. So you can take, you know, the specific pieces out of it that you want to view. And like you said, we're focusing on this one initial launch and piece of this box set is the US to Latam corridor. And the reason why we're focusing on that is because this is just such a high growth region. You know, we're seeing Latin America, 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, and the US exports to the top six Latin American markets exceeded 440 billion that same year in 24. So we already know it's a really big market, and it's a it's the market where a lot of the merchants have saturated, you know, like the US and looking elsewhere for growth markets. This is one that they kind of are looking at and have in mind. And especially some of these other merchants that kind of like a digital first and sort of like you don't even need to kind of penetrate your home market, you just go global right away. This is one of the markets that they are looking at. And yeah, obviously the figures in this market reflect, you know, huge growth in the digital commerce in this region. And yeah, these merchants want to capitalize on that growth. So, in addition to the actual size and growth of market, obviously the dynamics of this market throughout Latin America create a lot of opportunities and challenges when you start looking at, you know, like, well, how do I actually approach the market? And what do I need to think about? What are some of the main payment methods that I need to offer to be able to capture the consumers? That sort of uh is the background to what we focused on here. And that's why we started with this report to really address some of the complexities that the merchants face, to understand sort of how to approach the market and you know what to think about in terms of who the consumers are, how they want to pay, so on and so forth. Yeah.
SPEAKER_00:Okay. It's a great segue into the next question. And you talked about this a little bit, but the report describes how Latin America is one of the fastest growing e-commerce markets in the world. So, what do you think is driving that growth? And why should US merchants be paying attention now?
SPEAKER_01: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 biggest ones. And also that consumers in this market are really happy to be paying for things cross-border in the Almanac. And this is something that we sort of are monitoring also, is those cross-border corridors. So the consumers in the various countries in Latam, which countries are they buying from? Obviously, they're buying from their local e-commerce retailers and digital goods merchants, but are they also buying from other merchants outside of the borders? And then we see that really strong corridor that a lot of 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, for instance, they have a very strong corridor to China, but in throughout, particularly the six biggest markets, so Brazil, Mexico, Chile, Colombia, Peru, and Argentina, we're seeing that a lot of local consumers want to buy products and services from US-based companies. So that's really, if you're not thinking about how to access those consumers and doing it in a nice and elegant way, you should, right? And so this is uh sort of a handy, handy book to be able to get some insight into what you really should be thinking about.
SPEAKER_00:Okay. And you talked about this also, the payment preferences in Latam, they're evolving quickly. So can you explain some of the biggest shifts you've seen and what's fueling those shifts?
SPEAKER_01:Yeah, no, absolutely. We see, and I think a lot of this also, it was sort of a perfect storm when uh the pandemic hit. And at that time, the Brazilian Central Bank, Brazil obviously being the largest market in Latin America, had already started thinking about how we can build a nice digital way for consumers to pay, thinking about kind of upgrading the means of paying that they had in the market today, because they had a very high degree of unbanked customers and people were paying with payment methods that still exist today, but very much kind of like offline and clunky and slow, like Boleto in Brazil, et cetera. So they had already started putting this infrastructure in place to be able to launch what we now know as PICS, which is a real-time bank transfer to general payment methods in Brazil. But then what happened is right when they launched this payment method, COVID hit. And so a lot of the consumers in this market then got some relief 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 that happened that the government-owned bank Caixa was, you know, giving out cars to these consumers to be able to get, but but it really drove the consumers to adopt some of this new technology. So it really kind of accelerated what was happening. And then I think a lot of the other countries in Latin America, you know, like paid attention to what was happening in Brazil. So this have had a really nice trickle effect in a lot of different markets throughout Latin America and what's being built, you know, both by the individual central banks and other third parties that are, you know, wanting to jump on the bank wagon. But so what we've seen then is sort of like these bank transfers and digital wallets in Latin America, seeing very high growth rates year on year. So bank transfers we're seeing 30% year on year between 24 and 27, and digital wallets 19%. So it's really high growth for these specific types of ways of paying online and in person as well, in many cases. And then peaks, like I mentioned, that the Brazilian Central Bank came out with, they today represent 45% of all payments, and they're you know, right about now, probably surpassing credit cards in Brazil. So it's a huge shift, right? From it's like night and day going back just only five years. So what we're seeing overall now is that digital wallets are set to be the top form of payments for e-commerce across Argentina, Chile, Colombia, and Mexico by 2030. So it's huge growth there. So I guess in summary, you know, it's it's just the data shows that it's a shift away from traditional methods to more digital, modern ways of paying.
SPEAKER_00:Yeah, it's fascinating that any payment method in the world could be adopted from zero to 45% in only five years. Like companies would go crazy for that in the US, right? If that could ever happen. So it's fascinating. And I think the real-time aspect of it, COVID hitting and all that, and you know, all that digital stuff happening. But the report also highlights the role of cash-based payment methods. So even in this digital world, so why are those cash methods still so critical in this region that's moving towards this digital stuff that you were talking about?
SPEAKER_01:Yeah, no, it's a it's a good question. And even though we sort of tend to talk about Latam in broad strokes sometimes, we need to look at, you know, country by country. And Mexico is one of those countries that has a little bit of a different dynamic, and they do still have a lot of unbanked consumers and you know, adult population, basically. So what the numbers that we have that are most recent is that about 48% of Mexicans are unbanked, and that is huge, right? So, from an e-commerce perspective, cash options are key depending on sort of like what demographic what consumers you're really trying to go after. So if you don't have a bank account or a bank card or a credit card, then you have to enable something like OXO or OXO Pay to be able to capture those unbanked consumers. And it's kind of interesting because in Mexico, I think what we see is still a very high level of adults that are purchasing online and want to purchase online. But what we're seeing is that if you look at even some of the big name brands that are focusing on Mexico and have local uh e-commerce storefronts, still don't have that cash option in the checkout. So I think it's a huge opportunity for US companies here, you know, just by adding a payment method to be able to penetrate this market in a more efficient way. So I think Mexico is a huge opportunity for US merchants.
SPEAKER_00:Okay. Well, the Almanac also mentions super app ecosystems as a key area of development in Latam. So maybe this is kind of a three-part question, I guess. So maybe define what a super app ecosystem is. And then how does it shape the payments experience for consumers and how does it shape it for and create opportunities for merchants?
SPEAKER_01:Yeah, that's a good question. And I think when most people, if you know what a super app is and a concept, I think most of us tend to think about the Asian super apps that's available, you know, because we've seen a huge success for GRAB and GrabPay in Southeast Asia, as well as Alipay in China, and several more that exist in the APAC market. And these super app has just become a really ubiquitous tool for consumers in this market because not only is it a tool to pay, it's sort of there's other factors you can lend. There's buying out paid later opportunities, you can use it to for write hailing, to call kind of what we use here, obviously, like an Uber. It's a similar concept, but within that app in APAC, and it's sort of increasing the digital financial inclusion in general, right? And then it could be food delivery included in the app and package delivery. So there's so many things that we've seen in APAC. Now, this is sort of then coming into Latam and kind of a growing, some of these same aspects, but we're seeing Mercado Pago, which is a wallet that's been around for quite some time in Latam, born in Argentina, but now available throughout Latam, adding some more features that are sort of generally part of uh the super apps. We're seeing New Bank, which is, you know, one of the world's largest neobanks and growing leaps and bounds in Brazil, but also now in Mexico and going into several other markets. We're seeing Rappi and PicPay. So there's several initiatives that are sort of coming at this from slightly different directions and adding more features into their apps to be able to better serve consumers in so many ways and be able to give consumers the easiest way of paying and the easiest way for merchants also kind of to interact with their consumers, right? In more ways than one. So it kind of creates this ecosystem that really becomes very sticky, both for the consumer and for the merchant. So I'm really kind of curious over the next few years to see how these particular companies and more are gonna kind of take advantage of you know some of these opportunities to really become a nice service for these consumers in Latin America.
SPEAKER_00:Yeah, definitely will be an interesting trend to watch over time and see how well they can build critical mass for those. You know, this next question is something that I think a lot of companies struggle with. So I'm curious to talk about this, but there's a clear distinction between local and international cards in that region. So, what does that mean for U.S. merchants that are looking to expand? How do they decide which ones to integrate with? You know, which are the local card schemes they should pay attention to? I think that's a challenge that a lot of merchants have. So uh curious your thoughts on that.
SPEAKER_01:Yes, Greg, so some of these local cards that consumers are using in various countries in Latin America aren't simply enabled for international purchases. And you know, many times these consumers, when they are buying online, they are quite not even aware of if they're buying from a local merchant or an international merchant, right? And so if they're buying from an international merchant, meaning that they, that merchant doesn't have local entity in a way that they're able to acquire that transactions locally, then the issuing bank will see that, okay, here's the local consumer with the local cards being acquired to an acquire that is cross-border. And when they see that combination, they will automatically decline that because they suspect that it's a higher level of fraud typically when they see those combinations and will just straight out decline those transactions. So from a consumer, you don't maybe know what's going on underneath, right? All they know is that, hey, I wasn't able to purchase with my card. So that's not a very nice experience for that local consumer. And in many cases, that local consumer can actually call their bank up and even in some cases go to their local bank out and just kind of, oh, enable my card for an international purchase. But you might even know that you're able to do that or be savvy enough to be able to do that, right? So that's why like a lot of these transactions are simply declined. And there are, to your point, also some specific brands outside of just Visa Most card as well. And some of those are ELO in Brazil, Carnette in Mexico, and Aranja and Argentina. So there are some of these local card brands that they simply can't be acquired cross-border. You have to have local acquiring enabled to be able to take payments from the users of those issued cards. But also in those cases where some of the card branded cards can be accepted, even in those cases, there could be some challenges with those cards because, for one, it's more expensive to acquire those cards, and sometimes those fees kind of get pushed over to the actual 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 up to 8% additional cost on top of what they already bought for. And you know, as a consumer, you'll be like, why am I paying more here? And you know, you don't even realize who is actually taking that piece of the money, right? Thinking oftentimes maybe it's the merchant, and then that can lead to maybe a chargeback being issued because the consumer is very unhappy. And it's kind of interesting also because there's different sort of uh consumer experience when it comes to this. Sometimes all these fees might be baked into the actual fee that the consumer noticing, and sometimes it just sits as a separate line item on your card statement as consumer, and that's then it's like obvious, like someone is charging me extra for something here, and you know, whether I'm happy with that or not, you know, like but we do see a higher level of kind of chargebacks due to that these extra fees are sometimes on there. So what we're seeing is that 29% of the cards in the region are not enabled for international or overseas transactions. So just something to keep in mind that, you know, that's kind of one of the drivers for at least evaluate, you know, should I be processing these types of transactions locally, you know, to enhance that customer experience and be able to get higher authorization rates?
SPEAKER_00:Okay. Well, let's talk about some of the verticals. So retail, gaming, and SaaS stand out in the report as high growth verticals. So which of these sectors do you think holds the most untapped potential and why?
SPEAKER_01:It's hard to say exactly which one because I feel like the different types of vertical have different sort of opportunities and different approaches on how they kind of enter the Latin American market. But what we do see is that retail is a huge sector when it comes to LATAM. Latam is the fastest growing region for online retail around the world. So if you're a retailer in the US, you should be paying attention, right? You're probably already seeing to some extent, you know, a consumer wanting to buy your goods if you have that enabled for, you know, like consumers outside of the US. And retail accounts for 50% of total e-commerce spending, as it is the top growth sector. And what we're seeing specifically is fashion, electronics, and beauty and personal care, the highest segments that are generating the highest revenue. And the highest growth is within electronics, which we're expecting to exceed 65 billion of US dollars in volume in the coming years. And it especially from a retail perspective, if you're a retail merchant, Mexico, like we talked a little bit about earlier, is kind of one of those regions that really has a lot of opportunity. Because retail is very important in this market. Consumers are buying a lot of retail online, and that's about 75% of online sale is retail in Mexico. What you can read in the Almanac is that TikTok launched its TikTok shop in Mexico at the beginning of this year, enabling buyers to purchase directly in the app, and that's driving a lot of purchases. So that's been a huge success. And what we're also seeing then is that the way that the local consumers in Mexico are interacting with this retailer and a lot of other retailers is via the mobile device. So 78% is of the online transactions is via mobile. So it's also another thing to pay attention to if you go in as a retailer in Mexico, and it's true for Latam overall, to really optimize that interface in the mobile device.
SPEAKER_00:The SaaS market in Latam is growing faster than basically anywhere else. So, how do you see payment innovation supporting that trajectory?
SPEAKER_01:It's a good question because when it comes to SaaS, SaaS tend to have a little bit of a different business model, clearly than to retail, right? But also to a lot of other verticals out there. A lot of SaaS companies have adopted a subscription model, and that we're very used to that in the US, right? We I don't know, I don't know, Greg, how many subscriptions are 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 of was uh an American model to start with. Obviously, like over in Europe, it it's kind of also ambiguous now, and obviously in Latin America, like of course, you know, you're watching Netflix in most of these markets now, so also kind of used to the subscription model. But I think from a banking perspective is what we're seeing that they still kind of decline a lot of these transactions, also, because of course, when you're signing up the first purchase, or you know, if you're putting your card on file, put in your CVD code of your credit card, but then of course, a lot of those transactions that are coming after that is going to be the merchant-initiated transactions, and you might not see that CVD code. And then, unless that issuing bank's kind of fully aware of what those transactions are and are aware of kind of like what company it is and what business wallet it is, they might see that as a higher risk and you know, declining that to a higher degree. And that's what we have seen, you know, in the past with some of our merchants. So really kind of requires like a really good dialogue and kind of keep educating these local issuing banks so that they are aware what the transactions these are, and understanding that some of these potential questions that are coming from consumers, you know, like how you respond to that and how you redirect those, and also understanding that, you know, there could be some friendly fraud and understanding what kind of fraud that is, and you know, is that something that can be prevented and how you can prevent that? But basically, you know, like how innovation comes into this. I think there's various innovative ways that are being developed in the market to be able to have payment methods that consumers can use or kind of like really nicely works with some of these models. In Latin America, the way of paying with a card have often been that you pay for something when you go into, you know, a brick and mortar and buy a pair of shoes. So if you're in Brazil, Greg and you go into a shoe store and buy some shoes, for instance, they will ask you, okay, how many months do you want to pay off those shoes on? And you'll be like, wait a minute, they never ask me this when I go into, you know, like Nordstrom in the in the US. And so that's kind of trickled over, right, to how consumers are interacting with purchases online. So even with something like SaaS companies and subscriptions, you can kind of turn this on its head and say, like, okay, I have an annual fee that you've got to pay, but you can pay those off in instalments as opposed to, you know, the traditional way of having a subscription. And that way is sort of like you're working with uh how the actual market works from a from a perspective from how you pay, right? And then I think there's a lot of other companies that are taking this and building a nice interface around that. For instance, New Pay, which is new banks payment methods that they've launched into market, they are really thinking about okay, how can each of our merchants really make sure that they capture the payments and how can our consumers really pay in the way that they want to pay? So, within the wallet of New Pay, you can pay in like three different ways. You can pay directly from your bank account to the bank, or you can pay with your debit card and then add installments on top of that, or as a third option, is a buy now paid later option. So that way, so they've kind of like try to innovate to be able to make it work for both merchants to be able to get the money without having to have that transaction decline from a consumer. It gives them more options on really how they want to pay, right? And with New Bank being a neobank, they've obviously opened up more for those consumers that maybe couldn't really get a financial instrument or a bank card or a credit card with some of the more established banks. So I think it's sort of opening up for more consumers to come into the market and interact in a very nice way with the brands that they want to interact and buy from.
SPEAKER_00:Okay. Well, the report ends with a payments checklist. If you could distill it down, what are the top two or three steps that US merchants and PSP should prioritize first?
SPEAKER_01:Sure. So what we've done in our checklist is dividing it up in kind of what we call activate, accept, and manage. So first, obviously, you need to enter the market and be able to set things up so that you could get access to the market, right? And part of that is to get the local access to the local consumers. And we've touched upon this a little bit, but the question is do you need a local entity to access those? Do you have a local entity? Is that something that you want to do? Or do you want to partner with someone to accept payments? There are the options of that we offer at PPRO, and there's you know other partners out there as well that have what we call the merchant of record solution so that you can go local in the country but partner with uh a partner like PPRO, you know, for that local entity to give you access to appear exactly as you're processing that transaction locally and get the optimal auth rates and capture those consumers, but then get get the settlement to you know the preferred entity outside of Blacktown. Also thinking about the compliance piece, do you understand the local scheme rules and the compliance requirements? And from the funds flow and settlement perspective, how can you prepare for FX volatility and kind of cross-border remittance risks? So these are all questions, you know, you need to think about when you're going in and accessing 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 of questions and the checklist in the end of the new Almanac that we've come out with.
SPEAKER_00:Okay. Well, looking forward, what do you see as the biggest opportunities and the biggest challenges for merchants that'll want to enter the Latam market, say in the next three to five years?
SPEAKER_01:A couple of things. I think the the market is becoming more diverse in how you pay. I feel like, you know, even pre-COVID, you know, there used to be maybe one, a couple of ways of paying in each of these markets throughout the Latin American countries. And now it's becoming so diverse. You know, it's a combination of the various banks in the market, central banks, but also the other established banks that are coming out with new payment methods and small brands and wallets that are kind of growing. So it's becoming really kind of yeah, just diverse market in terms of payment methods. And it's going to be interesting to see sort of which ones take the large shares. But PICS is coming out as a clear winner, right? And then the other countries are either, you know, thinking about accepting PICs or something PICS like, you know, to be able to have that real time acceptance of payments. So I think what's happening in Brazil is really trickling down to the other markets. So I think that's a real opportunity for the merchants, you know, because it's becoming easier and you can get the funds much quicker. You know, than it traditionally have been able to get in the Latin American market. So I think there's a lot of opportunities of streamlining payments with a lot of options that are out there, you know, and platforms like P Pro kind of streamlining how you get access to the local market and also leveraging, by now pay later, and installments, like we talked about, you know, also to, you know, make your product and or service affordable to the local consumers. And still, you know, I think there's also challenges when it comes to both maybe like tax and regulation and things like that. But we're also obviously over the last few years seeing a lot of of those challenges being streamlined. You know, Brazil, for instance, wanting to have more investments and trying to open up a little bit more for those investments. For instance, you know, we're seeing a central bank establish what we call the EFX, EFX market so that you can easier be able to process locally. It was very tricky before in terms of kind of what withholding tax you have to pay in the market. And now that the tax structure has been somewhat streamlined. And, you know, it's going to be interesting to see what the other central banks do in the other market to see by streamlining tax management, too, for instance, right? But yeah, but that's something to kind of look into or utilize a partner to be able to manage that.
SPEAKER_00:Okay. Well, Theresa, this has been a great discussion. Any final thoughts before we wrap up the show?
SPEAKER_01:I think we talked a lot about the Almanac today. And so yeah, just want to make everybody aware that this is something we just launched. It's available on our webpage at pepro.com slash almanac. So we'll also have a link at the show notes. But uh yeah, just happy that we have this brand new piece of uh content for everybody. Uh a lot of my merchants have been been asking for it for some time. So glad to finally have it out in the market.
SPEAKER_00:Great. Well, Therese, thank you so much for being on the show today. I know your time is very valuable, so I really appreciate you being here today.
SPEAKER_01:Thanks so much, Greg. Thanks for hosting me.
SPEAKER_00:Absolutely. And to all you listeners out there, I thank you for your time as well. And until the next story,