Latin American e-comm merchants need to make some serious investments in online fraud mitigation, latest figures suggest.

The region will lead the way in e-commerce growth, according to new estimates from the leading payments company Worldpay, and its online fraud rate is also booming.

In its annual Global Payments Report, Worldpay predicts that the Latin American e-commerce market will grow at an average CAGR of 19% over the next five year, rising from US$59bn today to $118bn in 2021 – the biggest rise of any region.

The same report estimates that the global eCommerce market will grow at 11% over the next five years.

The research found that the three fastest-growing countries for eCommerce are Colombia, Nigeria, and Argentina. These “CAN countries” are forecast to lead the world with annual rises in eCommerce of 31, 30 and 24% respectively.

Mexico and Brazil are already among the top five e-comm markets for 15% and 20% respectively of the leading e-comm merchants, according to data collected by the Merchant Risk Council (MRC).

And in a survey of nearly 500 of its members, the MRC has found that the e-comm fraud loss rate this year was 1.5% in Brazil, and 1.9% in Mexico, the highest rates it reports from any region, while the order reject rate was 4.6% in Brazil and in Mexico it was a staggering 14.3%.

Worldpay’s research also examined the growth in mobile commerce, and found that total mCommerce penetration is set to rise from 38% in 2017 to 47% in 2021, driven by increased smartphone ownership and faster mobile networks.

Latin America is set to be in the vanguard of mCommerce growth, says Worldpay, with Colombia seeing a 64% rise, and 45% in Argentina – putting them in first and fifth position globally.

The researchers see Argentina on track to become an eCommerce powerhouse, on par with Brazil as early as 2024.

“In spite of a difficult economic history in recent years, Argentina benefits from an Internet penetration rate of over 80%, and the largest proportion of mobile Internet users of all Latin American countries,” they report.

“Strong connectivity is helping to power the Argentinian eCommerce revolution, as the country’s recovery has taken hold thanks to the greater integration with world markets and economic deregulation that followed President Macri’s election in 2015.”

According to the PEW Research Center, Argentina also benefits from a population with higher spending power and a larger middle class compared to its regional neighbours. Worldpay believes these factors help to explain Argentina’s outstanding predicted growth in both eCommerce and mCommerce, and demonstrate the investment and growth opportunities for the world’s retailers and other merchants.

Shane Happach, Chief Executive Officer – Global eCom at Worldpay explains: “No-one can predict the global economic climate over the next five years, but we can be sure that consumer appetite for online and mobile shopping will continue to see extremely strong growth. The rise in smartphone adoption and the continued improvement in mobile networks have important implications for merchants looking to take advantage of an increasingly well-connected middle class with greater disposable income.

“However, it’s important for retailers to understand the idiosyncrasies of each territory. No two markets are the same in terms of the population’s preferred payments methods, and each has different regulatory requirements, mobile penetration and banking practices. That is why it’s so important that merchants do their homework before they invest in new countries to ensure that they make the right strategic decisions.

“With the right support, however, retailers can seize a unique opportunity to take a lead in these emerging eCommerce markets,” Happach concludes.

Worldpay’s Global Payment Report 2017 report also highlights how the payments landscape is continuing to fragment, with options such as bank transfers, cash on delivery and pre-paid cards stealing market share from more traditional methods like credit and debit cards. The research finds that bank transfers are set to overtake both credit and debit cards as the second most popular global payment method behind e-wallets, adding an additional factor for retailers to consider when planning their eCommerce strategies.