The moment of accelerated digitization, new and better forms of payment and modernization of the banking system is an open invitation for the SaaS Market
At this moment, Brazil is promoting the 5G auction, after a test period in some selected places for adaptation of the technology, such as Campinas and the metropolitan region of São Paulo. This is another important step in the accelerated process of digital transformation that Brazil and all of Latin America have been going through in recent years, with special emphasis on 2020.
With the intermittence of lockdowns, the impossibility of agglomerations, and the limitation of transit across borders, the consumption of digital services and products has grown remarkably, with the expansion of distance learning, home office, and consumption of streaming services for entertainment. Added to this is the popularization of digital banks which offer lower fees and have managed to bring banking services to a large portion of the population that previously did not have access to them.
The time for SaaS in Latin America is now
This context of strong digitization, more credit and payment options, and market reheating makes the current moment attractive for those looking to expand their business in Latin America, especially for companies that already have a digital business model. Specifically, the software as a service (SaaS) industry has excellent growth prospects, with a CAGR of almost 24% by 2023, a significant figure, especially considering the economic gap caused by the pandemic. In the region, Mexico and Brazil, with more robust and resilient economies, lead this expansion movement, and are consolidating themselves as the most attractive options for business expansion.
As mentioned before, some sectors such as education have undergone a more incisive change than others, due to the restrictions caused by the pandemic, with an emphasis on distance learning and short courses taken online. Overall, the digital products sector (which includes games, streaming, courses, and others) has seen a 50% growth over the last year, making clear the growth trend in this sector and opening up space for new players in the digital business.
Similarly, SaaS companies have been performing well in the region, with more than 800 local organizations operating in the sector and thousands of other multinationals looking to expand their business in the area. In Brazil alone, the SaaS market is worth R$3.8 billion, according to Gartner, and the trend is likely to continue growing in light of the current demand for digital solutions.
Pay locally, act globally
To take advantage of the region’s excellent momentum, companies around the world must consider ways for clients to pay locally. When using traditional payout and remittance systems, they often face delays in receiving or paying, tax complexity, currency fluctuation, and other problems. This makes the whole process less efficient, more bureaucratic, and less clear, especially for customers, suppliers, and partners.
By comparison, organizations that rely on local payment processing solutions do not have to face these problems. Not only do they avoid various bank fees, they can also conduct their transactions in local currency and local payment methods, receive and pay more quickly, and are protected against exchange rate fluctuations.
Another important factor in favor of using local partners is the greater experience with the particularities of each region, since each country may have specific payment systems (such as the PIX in Brazil), different tax rules, and other local peculiarities. Instead of dealing with a long learning curve, it is more interesting from a financial and operational point of view to count on the support of a local supplier that already knows the rules and brings more consistency to the process.
Those seeking these benefits can count on BoaCompra, which has been helping hundreds of companies to do business in a simple and effective way in Latin America for 17 years through specialized, robust and flexible solutions, focused on the digital world. Talk to our experts and find out how we can help your company grow in the region.