Last week Becky Relic, a director on PayPal’s Government Relations team, and I had the opportunity and privilege of representing PayPal at the White House Conference on “Connecting the Americas”, as part of the preparations for the “Summit of the Americas” that took place in Cartagena, Colombia last weekend.
We had the remarkable opportunity to interact with Secretary of State Hillary Clinton and senior officials from the departments of State, Trade, Commerce and the Treasury to discuss opportunities for prosperity, development and innovation between the United States and countries in Latin America.
As I was leaving the conference, I started to reflect on what we had learnt that day and the outstanding opportunity we at PayPal have to shape the future of commerce in Latin America. The four takeaways that came to mind were:
The domestic opportunity in Latin America: By 2013, there will be more Internet users in Latin America than in the US. Stability and economic growth have fostered an unprecedented development of the middle class, more than 50% of all households today. Brazil is obviously the start and the spearhead of our domestic activity in the region. But, we also have a limited window of opportunity to shape the evolution of commerce in key markets such as Mexico, Argentina, Chile, Peru and Colombia to help make payments safer and easier for 220M Internet users and 450M mobile phone subscribers.
- The cross border opportunity: Latin America absorbs 20% of all the exports from the US, three times more than China. However, only 1% of the SMBs in the US access global markets and conduct export activities. Leveraging what Secretary Clinton defines as “the power of proximity” and PayPal’s unique cross border capabilities, there is an opportunity to open these flows for our large merchants and SMBs.
- The remittance flows into Latin America: 22M residents in the US send annually more than $45B to relatives in Latin America – twice the size of all ecommerce in the region. Senders with bank accounts and financial instruments, who are underserved by innovation and constrained by an industry that charges rates of 8-10%. We at PayPal have a historical chance to bring disruptive change, increase the quality of life for senders and receivers and improve an experience that is extremely emotional and recurrent.
- The domestic opportunity in North America: The Hispanic population in the United States has reached 50M, with a combined purchasing power of $1T – it would be on its own the 15th economy of the world, ahead of countries like Turkey, Indonesia and the Netherlands. With specificities in consumption habits, young demographics and more intense use of social networks and mobile devices, they are the fastest growing segment of the population, and a segment where we have an opportunity to improve the way millions of consumers shop and pay.
In summary, the opportunity for us to help shape the future of commerce in Latin America is unparalleled. We have the chance to influence the future direction of trade in the region and improve the lives of 600M people across more than 30 countries. Not a bad inspiration to get out of bed in the morning, right?
Jose Fernandez da Ponte, Senior Director of Latin America Strategy and General Manager of Central Latin America and Caribbean (cLAC) for PayPal.