Em Conversa: Alternative payments with AstroPay

Em Conversa tries to uncover the secrets of Latin America (LatAm) which has caused fintech market to boom, from being worth less than $50 million in 2016, to $2.1 billion in 2022. This week we spoke to Mikael Liechtensteinmanaging director i AstroPay, to learn about the evolution of alternative payments in LatAm.

Despite the growth of alternative payments, cash remains a very popular payment method in developing regions. LatAm is no different. But despite the complexities associated with the region, especially when it comes to the variety of currencies, organizations still want to enter the market. But why?

AstroPay is an online payment service that enables users to make online purchases on international websites. We spoke with the company’s CEO to learn more about why LatAm has become such an interesting opportunity for payment technologies:

Can you tell us a bit about yourself and the company?

I am Mikael Lijtenstein, CEO of AstroPay, a fintech company founded in 2009. Its mission is to help consumers in Brazil buy online internationally, especially those who do not have access to traditional banking services. AstroPay is the pioneer of digital payments in Latin America, and in 13 years it has expanded into new markets and become the payment solution for millions of customers in Asia, Africa, UK and LatAm, connecting merchants with users in a fast and easy way. and lightness.

Before becoming CEO, I was operations manager and managed the company’s sales and operations. This included managing AstroPay’s product development, innovation, sales activities and services in several markets. I have an engineering background and many years of experience in offering cross-border payments, as well as connecting global sellers to emerging markets through digital solutions.

Having gained a lot of experience operating in emerging markets, the business has grown exponentially with the number of consumers and merchants using our service increasing significantly, along with the payment methods made available in our digital wallet for users to use. Having established a solid foothold in Latin America, the business has expanded into Asia, Africa and the UK, and continues to do so as part of our international growth plans.

What are some big trends we are seeing in the LatAm fintech market?

We are seeing a gradual shift away from cash-based payments and a greater move towards alternative payment methods (APM) and digital wallets. Cards are still the region’s preferred online payment method with around 70 percent of e-commerce payments made via card, but digital wallets have grown and with the young population, e-commerce remains a nascent market with significant room to grow.

E-commerce is expected to grow by 30 percent each year until 2025, with an increase in the emergence of new payment methods, which provide access to the digital market as well as the financial system. We are particularly seeing an increase in local digital payment methods such as e.g PIX in Brazil. AstroPay started offering this earlier this year. There is also a growing trend in social commerce, with a significant number of Hispanics saying they prefer to shop through social media.

How has the digital payment scene developed in LatAm?

Digital payments in Latin America continue to thrive and drive financial inclusion and economic growth across countries in the region. An example is PIX, which will be launched by the Brazilian central bank in 2020 to enable peer-to-peer transactions similar to other products around the world such as Venmo. Brazilian consumers without a credit card are the ones who have used it. It is very popular among consumers and merchants due to its convenience and security.

During the pandemic, consumers in Latin America have become more open to using digital payments and e-commerce from home. The option is available to everyone, including those without a bank. AstroPay is one of the pioneers in digital payments in the region with global merchant partners looking to expand into Latin America. The latest example is our collaboration with Huobi Global.

Another example is in Uruguay where we have seen an acceleration in the digitization of payments since 2014, when the Uruguayan government launched the law on financial inclusion. It encourages digital payments and has proven to be hugely positive thanks to tax incentives.

Overall, digital payments in Latin America are becoming more customer-centric and consumers are aware of the type of journey and experience they want to have when it comes to paying and buying goods/services online. With this in mind, successful fintechs are those that truly understand and provide a simple, frictionless and easy payment.

The rise in mobile wallets and the fintech companies [in Latam] driving an explosion of e-commerce domestically. It provides opportunities for accelerated digital transformation.

How does AstroPay support the unbanked in emerging markets? Is there a timeline for getting everyone access to financial services?

Part of AstroPay’s success in emerging markets is that we get to know local needs, culture and customs. This is in addition to learning their pain points so we can offer them a tailored and tailored payment experience. It also required in-depth research to understand consumer preferences and the most popular methods and providers.

We’ve also discovered that a seamless checkout experience has been shown to increase conversion rates at checkout. In order to provide users with a smooth user experience, it is crucial to ensure that we create a journey where pain points are avoided, with one-click experiences and automatic payment fulfillment. Timing is also crucial when introducing a new payment method to stay ahead of consumer demand and keep pace with the latest trends and developments in innovation and regulation.

At AstroPay, we have an entrepreneurial spirit and unwavering commitment to finding new solutions to meet the daily financial needs of our global community, and developing products according to their needs. We offer a prepaid voucher to pay online on hundreds of international sites and this year we have launched Visa and MasterCard debit cards to shop online or at any store that accepts them. This move expands the reach of our user base and at the same time brings more benefits to our customers.

How will the AstroPay offer differ in a developed country? Will this come with any unique challenges?

When entering a new market, the biggest challenge is to understand the complexities and peculiarities of the payments landscape in the region. This includes the ecosystem players, payment system, regulations, local and international payment methods, etc. When we entered the UK last year, this was the first challenge, but it was nothing new for us.

Our extensive experience in working to develop local solutions by getting to know and understanding our users, what they fully want, meant that we were well equipped to take on the challenge. We are able to offer exactly what our customers need by respecting the social and cultural differences of each individual user.

Have there been any noticeable similarities or differences between the LatAm and MEA markets?

Cash is a dominant payment method in the Middle East and Africa, and Latin America, but the trend is declining as mobile and digital payment methods develop and rapidly gain momentum in these regions. But even with the rapid adoption of technology, there are still many people who do not have access to the internet or do not have a bank account.

Latin America is on the same digital journey as other emerging markets in Africa and the Middle East, as well as countries in Europe and Asia. The rise in mobile wallets and the fintech companies are driving an explosion of e-commerce domestically. It provides opportunities for accelerated digital transformation. Countries in these regions attract many international companies, fueling even more cross-border transaction flows. AstroPay is proud to play a role in this journey and help transform people’s lives.