Like other more mature travel markets, credit card is the predominant payment method for travel in Latin America, especially as consumers in the region have grown more comfortable paying online. But according to a new Phocuswright report, Latin America features a highly innovative travel payment landscape, with a variety of payment methods that help boost conversion and provide flexibility to travelers.
Phocuswright's Latin American Online Travel Overview uncovers how concerns over online fraud and security in the region have been largely eliminated, and the number of credit cards in circulation has grown along with the economy. While many consumers do opt to purchase travel services and products using global credit cards, card penetration varies considerably from one country to the next. In many markets, local and customer cards are also popular. In addition, there are options to pay in retail outlets, such as supermarkets, departments stores and quick-payment kiosks. These nontraditional payment touchpoints give travelers a wide range of options, and are crucial to conversion. At the same time, banks are becoming a strong partner for the sector, providing the middle class new access to credit, and working with industry players to create and promote loyalty programs.
"There is still a strong competitive advantage for regional brands in Latin America, in part because of their ability to offer alternative payment options for each market," says Phocuswright's director, Latin America, Patricia Rasore. "For global brands to succeed in this space – OTAs in particular – they must match or exceed the services being offered by local and regional firms, and this includes providing alternative payment options."
Based on nearly 100 interviews with travel suppliers, intermediaries, technology providers and media sites, Phocuswright's Latin American Online Travel Overview helps travel companies understand this unique and quickly evolving travel marketplace. The report sizes the region's total and online travel markets, and examines the primary segments (air, lodging, car rental and vacation packages) and countries shaping its development. Analysis of the supplier-direct and intermediary channels reveals important booking trends, while discussion of the increasing influence of social media and mobile points to where the market is headed in the future. The report highlights key global and regional players, and their efforts to carve a niche for themselves in this dynamic marketplace.
With strong economic and tourism development, a rapidly expanding middle class and a unique payment landscape, most Latin American nations are poised for double-digit online travel growth through 2012. Purchase Phocuswright's Latin American Online Travel Overview to understand and tap the potential of this promising market. The report is included in the Global Edition and available for sale (US$1,095) in the Phocuswright Store.