E-Commerce Overview: Colombia

With a supportive environment for online shopping and ready access to the US, e-commerce is growing steadily in Colombia. Here’s all you need to know about the market landscape and how PayU can help you reach 12 million potential new customers.

Key Market Benefits

  • Leverage the market potential

    The e-commerce landscape in South America’s second largest consumer market is a highly promising target for businesses interested in Latin America as a whole. With a consumer population of 50 million in South America’s third largest economy, the future of e-commerce in Colombia is bright. The market is increasing at an annual rate of 18% and is projected to exceed $8 billion by the middle of the decade.

  • Add nearly 12 million online customers

    Almost 12 million Colombian consumers shop online, spending an average of over $126 in a year and 14% of total online shoppers are cross-border consumers.

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    Capitalise on growing market opportunities

    Latest figures on the top online shopping categories in the country rank fashion as having the fastest projected growth in e-commerce spend between 2019 and the end of 2021, growing by 58% from $1.4 billion to $2.2 billion. Beauty and cosmetics, digital goods and education are also fast-growth e-commerce sectors. In total, between 2019 and the end of 2021, the beauty and cosmetics sector is expected to have grown by a total of 53%, from $116 million. Year-on-year growth in spend proved significantly higher for digital goods merchants using PayU’s payments platform (62%). Last but not least, according to our data, the education sector generated a turnover of over USD 350 million in 2020, which compared to 2019 represents a 73% increase.

Good to know

 

No local entity required

You will not require a local entity for both card and alternative payment processing (physical products excluded).

Favourable environment drives further development

One major factor in the development of Colombian e-commerce is a highly supportive public sector. In 2020, three tax-free online shopping holidays generated nearly $250 million in additional e-commerce revenue across our payments platform in Colombia. The government has also set ambitious targets for financial inclusion, which will enable more consumers to participate in e-commerce. Last year Colombia already reached its 2022 goal of 85% financial inclusion, two years ahead of schedule.

Notably, Colombia is the only Latin American country with a dedicated Ministry of E-Commerce, demonstrating the country’s eagerness to further evolve in this direction.

US – Columbia e-commerce corridor

Well-established connections with Miami and other ports in the southern United States help to enable particularly efficient logistical access for US e-commerce sellers to the Colombian market. At the same time, Colombia’s open trade regime reduces challenges to cross-border e-commerce which international merchants may face on other regional markets.

Key payment methods

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Credit and debit cards

Credit and debit cards are the preferred payment method of many Colombian customers. In addition to Visa, Mastercard, AmEx and Diners, cards issued by local banks are widely used.

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Direct debit

When choosing to pay via direct debit customers give third parties permission to debit funds from their bank account, saving the time required to take the additional action of entering credit card data or conducting a bank transfer. This payment method is widely used in Colombia and considered to be convenient, cost-effective, and secure.

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Online bank transfers

With the outbreak of COVID-19 the uptake of consumer internet banking has rapidly become a more essential aspect of payment activities. In Colombia the PSE bank transfer solution is widely used as it enables clients of different local banks to pay online directly from their trusted provider. PSE is supported by 20 Colombian banks.

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Digital wallets

Digital wallets like Apple and Google Pay account for slightly more than 12% of Colombian e-commerce transactions.

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Cash payments

Cash payments and cash on delivery still play an important role in Colombia due to a large unbanked population. Online/offline solutions like Efecty and Via Boloto allow consumers to check out online and then pay in-person with cash at a physical location. Both payment methods are supported by PayU.

Why work with PayU in Colombia

Merchants who trust PayU in Colombia

 

Join top brands that have trusted us to ensure outstanding        e-commerce experiences:

Start working with us now

Grow your business by expanding to Colombia. Partner with us and add 12 million potential new buyers to your online store.
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