Author: Meirav Adi

ecommerce emerging markets fintech

Enormous opportunities and tricky challenges: Processing eCommerce payments in emerging markets

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Here at dLocal, we’ve known for some time that there are colossal opportunities for eCommerce merchants wanting to expand into emerging markets. The COVID-19 pandemic is ratcheting up that growth even more, especially for retailers and sellers of digital goods.

European, US, and Chinese eCommerce companies are struggling to expand in their mature domestic markets. Meanwhile, the growth rates of emerging markets are noticeably higher: The economic growth of emerging markets and developing economies is at 4 – 7%, while that of advanced economies is approximately 2%.

Mandated stay-at-home orders in several countries during the pandemic forced retailers to close physical stores, moving their business to digital. According to, Latin America will be the fastest-growing retail eCommerce market this year, with an impressive growth of 36.7%. It is the first time since 2010 that Asia-Pacific will no longer hold its historical No. 1 position.

The next big thing: Africa

If you’ve been following our efforts to connect global merchants to emerging markets, then you probably know that we have a sizable footprint in Latin America, Asia, and Africa. In particular, the latter has been gaining a lot of attention lately, as more and more merchants are eyeing this mostly untapped market. For instance, Microsoft has just decided to leverage the dLocal 360-degree payment platform to increase its reach in Nigeria. Also, we see more and more alternative payment methods popping up, such as Nigeria’s Verve and Egypt’s Fawry.

In short, those with a finger on the fintech and eCommerce pulse see venturing into Africa as the next big thing. It’s an insight we’ve been aware of for some time. In 2018, we launched in South Africa and then, soon after, Nigeria. Today, we also have customers doing business in Cameroon, Egypt, Ghana, Morocco, Kenya, and Senegal — and we’re continuing to work with global online merchants and financial institutions to support them as they expand into other parts of the continent.

To get an idea of just how burgeoning the African market is, look no further than mobile money. Mobile money payment deployments in Sub-Saharan Africa are increasing by nearly 40% each year. As an example, Kenya-based M-Pesa is now the world’s largest mobile money network.

Challenges ahead

While it’s exciting to see such promising economic growth, merchants need to be aware of challenges when expanding their operations into emerging markets. If you think it’s a simple pivot from doing business in, say, the US and Europe to emerging markets, you’re in for a big and unpleasant surprise. There are all kinds of potential issues that lie in wait in Latin America, Africa, and Asia that don’t exist in mature economies. Examples include a lack of technology readiness, complicated regulations, and weak eCommerce infrastructures, to name just a few.

Here are a few of the most severe problems you’ll run into:

Lack of infrastructure. The lack of legacy infrastructure makes the overall ecosystem, in each country, hyperdynamic, with many innovative players keep disrupting the way people shop and transact. You’d be hard-pressed to find many consumers who own an international credit card or even a bank account, but still are part of the internet economy. Most pay with cash, local credit cards, or alternative methods such as mobile money. You must know how to reach the unbanked, deploy payment methods consumers are used to, and keep up with the innovation. 

Confusing tax laws. Discussion of this topic is enough to make any merchant either fall asleep or start to panic. Tax laws in emerging markets are complicated, vary by country, and are often in a state of flux. Of course, this poses a severe problem for merchants, as it takes a great deal of time to learn and keep up with these laws, and most merchants lack the resources to do that. It’s why you should seriously consider consulting with an outside vendor with expertise in international commerce tax law.

Fraud and cybercrimes. Global eCommerce and cybercrimes are on the rise, especially now with the pandemic in full swing. Last March, for instance, cybercriminal attacks rose by more than 667%. What can make containing fraud in emerging markets intimidating is each market and region has its particular fraud patterns, and some industries are especially prone to fraud. For example, the MEA region saw a 144% year-over-year increase in email fraud attacks on the retail sector in 2018. In LATAM, apparel, and accessories chargeback fraud cases increased by 60% in 2019. Fraud cases relating to digital goods, such as gift cards and electronics, have risen by 37% in the APAC region.

Partnering with dLocal

If I haven’t scared you off from processing payins and payouts in emerging markets, this is a good time to describe dLocal’s solution, because it expertly addresses these challenges. It’s

why more than 450 global eCommerce retailers, SaaS companies, online travel providers, marketplaces, and financial institutions rely on dLocal to accept over 300 locally-relevant payment methods, as well as issue millions of payments to their contractors, agents, and sellers in growth markets around the world.

What does dLocal bring to the eCommerce table? Our platform is the most effective solution to fill the need of global merchants to reach emerging markets. Our $1.2B valuation from last September not only recognised dLocal as Uruguay’s first unicorn, but it also reflected that we meet that need in a way that’s global and unabashedly robust.

But what does that mean? Suppose I had to distil our value and corporate philosophy. In that case, I’d say we can connect merchants to emerging-market consumers in a manner that allows both parties to keep doing business the way they’ve been doing it. That requires dLocal to have an in-depth understanding of both the merchants’ and local consumers’ experiences and needs. In short, we see their success as being able to “see” each other while the dLocal technology is virtually invisible. Merchants enjoy higher conversions; consumers see near-zero disruption to their lifestyles. 

Why dLocal came to be

It’s because of the complexities I mentioned earlier that dLocal got started in 2016. We saw emerging markets’ opportunities and knew that merchants wanting to tap into them could suffer financially if they tried a do-it-yourself approach. So we set our minds to become intimately familiar with every emerging-market country that felt “ripe” for this connection. The vision was clear from day one: We wanted to offer a pain-free, seamless, and profitable way for global merchants to receive payins and process payouts in growth regions.

Today, we’re working with many merchants, including Google, Uber, Spotify, and others, providing them with the tools they need to reach populations they would have found nearly impossible to reach before. And those tax headaches? dLocal has on-the-ground tax experts who ensure that merchants are operating according to local tax laws.

Perhaps our most effective superpower, however, is our familiarity with consumer behaviours. We’ve already talked about how emerging-market consumers tend not to be tied to financial institutions and instead prefer local payment methods. I should add, too, that these shoppers often like paying with instalments. The Pay-Later option is increasing in popularity across emerging regions. Our platform is designed to meet these consumer needs, and merchants benefit with high conversion rates and fewer transaction failures, while at the same time responding to legal and regulatory requirements from their headquarters. 

The nasty business of preventing fraud

The last issue that’s critical to discuss is fraud. From day one, we’ve been vigilant about protecting user data both for payins and payouts. Our team, which has more than nine years of expertise in detecting and managing fraud in emerging markets, is continuously improving our fraud prevention module, dLocal Defense. dLocal Defense is designed to prevent fraud while minimising the impact on legitimate transactions. Our models are fed with behavioural data from hundreds of our partner merchants. Combined with the use of external tools, dLocal Defense is highly efficient in detecting and preventing fraud.

For clients who require additional protection from fraud incidents, dLocal’s Chargeback Protection offers 100% coverage for all fraud-related chargebacks received in any of our operating countries. Any transactions turning into a chargeback that we fail to reject are covered in their full amount.

When your company is considered a disruptor, many don’t know what to make of the evolution in a particular industry. To those of us at dLocal, however, this change is necessary and by design. We’re excited to offer tools that can open new areas of opportunity for eCommerce merchants worldwide.


As Vice-President of Sales at dLocal, Meirav Adi leads the company’s outreach efforts, working with top-tier merchants and fintech ecosystem players in EMEA. Before joining dLocal, she served as Vice-President in sales and business development at Citi. Meirav holds an MBA in finance and a BA in economics from Ben-Gurion University (Israel).


dLocal is the world’s leading payments-processing company that allows global merchants to reach consumers in emerging markets. Using the dLocal platform, our partners process payins and payouts using local methods — all from within a single API — as well as increase conversion rates and reduce transaction failures.

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