How much profit are you losing every month without even realizing it? It’s a question that almost no e-commerce business in Latin America asks itself, because they track fraud, traffic, and overall conversion rates—but rarely audit the exact moment of payment, where three revenue leaks coexist simultaneously: checkout errors, poorly negotiated processing costs, and underreported fraud. If you manage payment methods for an e-commerce business, this directly affects you:
- You negotiate fees without looking at the actual cost per channel.
- Your actual fraud figures likely don’t match what you see on your dashboard.
- Your checkout process may be lowering your conversion rate without you even realizing it.
- You’re choosing between a payment gateway and an aggregator based on incomplete data.
Mercado Pago, Nuvei, Fintoc, Lyra, and Klap process millions of transactions in the region, and this is what they see in their day-to-day operations—not just in product theory—regarding where margins are lost. They shared this in the webinar organized by Known Online: “The Hidden Cost of e-Commerce in Latin America: Fraud, Fees, and Conversion Rates You’re Losing Without Realizing It.”
Key points from this article on payment methods:
- Mercado Pago and AI: Artificial intelligence is already making recommendations, providing assistance, and actively participating in purchasing decisions. This is forcing retailers to redesign their customer experiences, as AI agents are taking on an increasingly prominent role.
- Checkout as a business driver: It has evolved from a simple operational step to become one of the key areas for optimization. Every click eliminated, every second saved, and every friction point resolved directly translates into higher conversion rates and return on ad spend (ROAS).
- Lyra and Payment Declines: A declined transaction isn’t the end—it’s an opportunity for improvement. Optimizing payment acceptance and understanding authorization rules allows you to recover sales and generate additional revenue without spending more on marketing or customer acquisition.
- Nuvei and regional expansion: Growing in Latin America means adapting to very different realities and habits. Payment localization is no longer a competitive advantage, but rather a basic requirement for participating in the market.
- Klap and Innovation: Innovation in payments isn’t about adding technology just for the sake of it, but about using it to build simple, secure, and reliable experiences that enable frictionless shopping and increased sales.
- Webinar conclusion: Payment is no longer just the “final step in the purchase process”; it has become one of the main drivers of growth in digital business. The real competitive advantage lies in how each transaction is processed, approved, and secured.
The Diagnostic Error: Measuring Fraud When the Problem Is the Invisible Margin
Most e-commerce businesses in the region evaluate their payment operations based on a single question: “How much fraud do we have?” That’s the wrong question. According to the analysis presented by Tomas Arroyo, Commercial Manager at Nuvei Ecuador, up to 46% of the transaction blocks and declines currently attributed to fraud prevention actually involve legitimate customers caught up in operational friction.
That’s where the invisible margin lies: it’s not fraud that needs to be curbed; it’s actual sales that the system is mistakenly rejecting. Nuvei identified four areas where this happens systematically:
- Outdated anti-fraud rules that block legitimate patterns (for example, a shared public network IP address) and end up hindering legitimate transactions.
- Static controls versus variable demand: During high-volume events (Cyber Days, seasonal campaigns), if risk parameters aren’t proactively coordinated with the payment gateway, the alert system itself rejects legitimate purchases due to “unusual behavior.”
- Data quality, not lack of approval: checkout forms that accept email addresses without an “@” or incomplete phone numbers are flagged as a risk and abort the transaction before it reaches the issuing bank.
- Rigid authentication that disrupts the customer journey with slow validation challenges right at the moment of payment.
The technical solution proposed by the industry is the migration to 3DS 2.2, a protocol that transparently (frictionlessly) analyzes hundreds of variables in the background and only requires biometric verification or a dynamic PIN when there is a real risk. The underlying logic: security and conversion are not opposing goals; they are the same decision, poorly calibrated.
The static checkout: the point of sale that operates blindly
While brands invest in traffic and product catalogs, conversion rates often plummet at the last click for one simple reason: the checkout process is set up once and never adjusted again. Matías Perales, Sales Manager for Chile at Fintoc, calls this “blind payments”: merchants operating without real data on which payment method converts best for each customer segment.
The cost of that technical oversight has already been calculated:
- 70% of consumers say that the availability of their preferred payment method directly influences where they choose to shop.
- 13% of users immediately abandon their cart if they don’t find their preferred payment method at checkout.
Perales compares it to a brick-and-mortar retailer that displayed exactly the same window display for every customer who walked into the store, no matter who they were. No one would do that in a physical store, but that’s what most e-commerce sites do every day at checkout.
A static checkout has a twofold impact on the P&L: on the one hand, lost conversions when the user can’t find the payment method they already use and abandons the cart; on the other, margin is invisibly eroded when, in the absence of business rules, the buyer randomly chooses the method that appears first—and that method is usually the one with the highest commission for the merchant.
The solution isn’t to clutter the screen with more payment buttons (that increases cognitive load and lowers conversion rates), but rather to show the right option to the right customer. Fintoc cites a global study by Stripe on Apple Pay: enabling it intelligently generated a 22% increase in revenue and conversion—not because of the button itself, but because the buyer was shown the payment method they already had available. This is known as the principle of extrapolation: if a single, well-presented payment method generates that impact, dynamically orchestrating the entire checkout process multiplies the effect.
A dynamic checkout adjusts three variables in real time for each shopper:
- Customer profile: age, purchase history, and average order value to determine which method to display first.
- Conversion optimization: Prioritizes thepayment method with the highest statistical probability of success for that user.
- Transaction cost (smart routing): If two payment methods have the same probability of conversion, the system automatically routesthe transaction to the one with the lowest cost for the merchant.
According to data from Fintoc, this results in three direct financial benefits: +10% conversion rate on average, an increase in lifetime value due to a smoother shopping experience, and Up to 4 times lower transaction costs thanks to intelligent routing. The dilemma for technology teams is whether to build this logic in-house—at a high cost in man-hours and requiring individual integrations for each gateway—or to integrate it ready-to-use, reducing time-to-market from months to days. Fintoc already supports more than 1,600 companies in the region with this infrastructure, including Rappi, Mercado Pago, H&M, Converse, JetSmart, and CMR Falabella, processing more than USD 5.5 billion and reaching more than 8 million users in Chile.
Recurring charges: churn that is labeled as “churn” but isn’t actually churn
In subscription models—SaaS, streaming, education, lending—there’s an assumption that’s rarely questioned: if a payment is declined, the customer is gone. Juan Ignacio Piazza, Lyra’s Business Development Manager for Chile and Argentina, argues the opposite: in most cases, it’s an operational failure in the payment process, not a decision by the customer.
The most common causes are mechanical, not intentional: expired cards, replacement of a card due to theft or a bank upgrade, or insufficient funds on the exact date of the debit. Asking the customer to re-enter their information manually opens a window where the LTV is wiped out.
Lyra approaches the architecture of recurrence along three axes:
- Certified security: PCI DSS 3.2 Level 1, PCI PIN, Visa Merchant Agent certification, and 3DS V2 as a non-negotiable requirement.
- Network Tokens: Unlike traditional vault tokens, if a card expires or the cardholder switches banks, the branded token is automatically updated via the network (Visa, Mastercard, Amex), without the user having to re-enter anything. This eliminates technical churn at its root.
- Multi-acquirer switching: If an acquirer experiences intermittent service (for example, Getnet), the gateway routes the transaction in real time to another available acquirer (Transbank, Klap) to ensure approval rather than losing the payment.
The case study Piazza shared illustrates this point: a live soccer streaming platform, with high-value tickets and massive transaction volumes processed in minutes, combined dynamic switching with brand tokenization and reduced its rejection rate from 60% to 30%. That’s not checkout optimization. It’s revenue that already existed and was being left on the table.
The agent-driven era: when the buyer is no longer just a person browsing your site
The most fundamental change discussed in the webinar wasn’t about fraud or fees. It was about who makes the purchases. Sebastián Vigneaux, Senior Analyst of Online Payments at Mercado Pago, defined “agent-based payment” as the ability of a AI to execute transactions on behalf of a human, based on a mandate and specific rules. The fundamental shift: we’re moving from “making” the purchase to “delegating” the purchase.
The traditional payments ecosystem—user, merchant, card network, banks—now includes a fifth player: the AI agent, which sits between the user and the merchant and makes decisions, navigates, and executes actions within the financial limits defined by humans.
This already has market potential, not just product potential:
- Morgan Stanley estimates that by 2028, agent-driven transactions will exceed US$200,000 million annually, accounting for 4.6% of global e-commerce.
- Salesforce reports that 66% of shoppers (2 out of every 3) want AI agents to monitor prices and automatically make purchases the moment a product’s price drops.
- Globally, Klap notes that 73% of consumers already use AI at some point in their purchasing process, and that by 2030, nearly 50% of online purchases will be made through agents.
Chile stands out as the most advanced regional testing ground for this model, for three structural reasons: the Fintech Law (2023) and the Open Finance framework, which require banks to expose APIs for account balances and card information with the user’s consent; a high rate of financial inclusion driven by the RUT Account; and technical pilot programs already carried out in March 2026 by Santander and Visa, which validated delegated consent and the use of agent tokens—the agent never knows the actual card number, expiration date, or CVV.
The business implication is clear: if your catalog lacks clean technical documentation, structured APIs, and data that algorithms can read, the AI agent won’t find you. It will choose your competitors who are prepared to be read by a machine—not just by a human.
Conversion in the Age of Agents: The Checkout Isn’t Ready Yet
Marcelo Salazar, Klap’s Markets and Multiservices Manager, shared the statistic that ties all of the above to actual conversion: Traffic driven by AI can convert up to 9 times more than traffic from social media, and direct recommendations from AI convert 4.4 times more than a traditional search.
The problem is that, today, agent-based checkout has a below-average conversion rate—not because there’s a lack of demand, but because the e-commerce infrastructure isn’t ready to handle automated purchases. Visa, Mastercard, and Google are already developing a solution to this: network tokenization protocols and the “Know Your Agent” model, which issues revocable agent tokens with strict spending limits.
While that infrastructure continues to mature, Salazar identifies an opportunity that most Latin American businesses are still failing to take advantage of today—without having to wait for the AI agent—namely, offering digital wallets such as Apple Pay and Google Pay. When a business enables them, between the 35% and 40% of their sales shifts to that payment method in just three or four months, thanks to biometric authentication that eliminates the need for bank passwords. The main obstacle isn’t technological: it’s administrative legacy—merchants who maintain cumbersome reconciliation processes due to their resistance to change, and who pay for that resistance in lost conversion rates every day.
Payment methods are no longer just the final step in a purchase—they are the engine of growth
Five experts, five different perspectives—fraud, dynamic checkout, recurring payments, AI agents, conversion—and one underlying conclusion: payment is no longer just the final step in the purchasing process; it has become one of the drivers of growth in digital business.
It’s not enough to have good traffic or a good store. The real competitive advantage lies in how each transaction is processed, approved, and secured—and in whether that architecture is ready for a buyer who, more and more often, isn’t a person with a mouse but an agent carrying out an order.
This is exactly the kind of revenue leakage we address at Known Online through our Revenue Intelligence approach: it’s not about adding yet another payment gateway or implementing more aggressive anti-fraud measures, but rather about auditing where the payments ecosystem—checkout, risk rules, tokenization, recurring payments—is leaking profit margins that already exist in your business. A Digital Profit Audit starts right there: margin diagnosis, impact simulation, and a concrete 90-day roadmap for correction.
How much margin are you leaving on the table with your payments?
If your team is already handling high volume and needs to know exactly where your profit margin is being eroded, fill out the form and we’ll schedule a diagnostic assessment.
Frequently Asked Questions About Payment Methods and Fraud in Latin American E-commerce
What percentage of payment declines in Latin America are actually from legitimate customers? According to Nuvei’s analysis presented in the webinar, up to 46% of blocks and declines attributed to fraud prevention are from real, honest customers—not fraud attempts.
What is an agent-based payment? It is the execution of a transaction by an autonomous AI on behalf of a human, within a specific mandate and spending rules (budget, time, requirements), without the human interacting directly with the checkout process.
What is a Network Token, and why does it reduce subscription churn? It is a branded token issued directly by Visa, Mastercard, or Amex that is automatically updated when a customer’s card expires or is replaced, eliminating the need for the user to re-enter their information and preventing technical churn in recurring payments.
What is a dynamic checkout, and how does it differ from a static one? It is a solution that adapts in real time to each shopper’s profile, displaying the payment method most likely to result in a conversion and the lowest cost to the merchant. According to Fintoc, this generates, on average, a 10% higher conversion rate and up to four times lower transaction costs compared to a static checkout that does not adjust by segment.
How much can a merchant improve its approval rate by using multi-acquirer switching? In the case study shared by Lyra, a sports streaming merchant reduced its decline rate from 60% to 30% by combining multi-acquirer switching with brand tokenization.
How does AI impact e-commerce conversion today? Traffic driven by AI can convert up to 9 times more than social media traffic, and direct AI recommendations convert 4.4 times more than a traditional search, according to data presented by Klap.
