While Latin America certainly plays a strategic role for many businesses expanding internationally, it is often not their core market and, as a result, can be a tough sell for investment.
Increasingly, expanding into new jurisdictions requires a significant focus on understanding local payment standards and regulations — not to mention overcoming language barriers and mitigating the supply chain risks that can arise with any cross-border growth trajectory.
At the same time, businesses are growing weary of adopting a rising pile of technologies and platforms that can address these cross-border B2B payments pain points for them. While this can stand in the way of customer acquisition for solution providers — and in the way of global growth for business end users — Carlos Steneri, head of expansion and sales for Bamboo Payment Systems, told PYMNTS that this challenge also opens up the opportunity for B2B payment technologies to take a more unified approach to their offerings, combining B2B and B2C payment solutions in a single, cross-border payment solution.
Like any region, there are an array of unique challenges across LATAM that can vary from country to country, each with its own tax regulations and national payment infrastructure.
“There are decentralized systems that have their own regulations across each country,” said Steneri. “Latin America does not have a single standard for facilitating, for example, bank payments across borders to facilitate B2B payments. That’s the biggest challenge.”
The level of access to traditional banking and financial services for small- to medium-sized businesses (SMBs) can vary greatly, too.
Uruguay, for example, “is a very advanced country in financial inclusion, and this includes [SMBs],” said Steneri.
Yet at the broad level across LATAM, he said, there are regions in which access to financial tools can be limited — a reality that expands to SMBs as well as consumers.
Traditionally, the reliance on wire transfers to facilitate cross-border transactions has meant that businesses remain stuck in an expensive loop of sluggish and opaque money movement, whether sending or receiving funds.
Consolidating Payment Flows
Bamboo Payment, which announced this week its expansion throughout Latin America to provide B2B and B2C payment services across the region, addresses this pain point through its own relationships with local banks.
Steneri noted that the company takes a more customized approach to addressing businesses’ payment needs. Its B2B payment offering focuses on integrating with back-office platforms used by business customers, and while its PAYIN services are generally tailored to businesses accepting consumer payments, he said the tool can be customized for B2B use cases — for example, a B2B software company that needs to accept recurring card transactions.
Having a hand in both the B2B and B2C fields of payments not only supports this need for customization, but as Steneri noted, also addresses the growing complexity companies face in managing a dizzying array of platforms and solutions addressing B2B and B2C needs, both domestically and internationally.
Consolidating these offerings can enhance the transparency of capital inflows and outflows for a company, streamlining accounting and analysis. And, by lowering the barriers to adopting a technology, organizations may find it more worth their while to invest in such tools to expand into an important geography. According to Steneri, such a unification of B2B and B2C services is in line with where the payments industry is headed.
“It’s a continuation of efficiencies in the payments industry, and trying to centralize as many solutions in a single integration,” he said. “It’s as simple as that.”