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PayPal Helping E-shoppers Tackle Shipping, Currency Challenges

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PayPal is working on a series of initiatives to help Latin Americans, particularly Brazilians, shop more abroad by overcoming high shipping costs, customs duties and fluctuating currency risks, Renato Pelissaro, marketing director for PayPal Latin America told BNamericas.

According to a recent PayPal study, 4% of Brazilians shop online exclusively abroad compared to 7% in Mexico.

The fact that most credit cards in Brazil are not authorized to make purchases outside the country is a major impediment.

To address that, PayPal and a local bank have developed an international prepaid card that can be used for making purchases abroad with PayPal.

The foreign exchange rate is locked at the time of purchase.

"That is much appreciated by consumers given the amount of currency appreciation and depreciation we've seen here in recent months," Pelissaro said.

Shipping related issues are also a concern, namely the time taken to receive the product and the additional cost of getting a product through customs, which in Brazil can be over 50% of the cost of the product.

"Buying clothes from China will be way cheaper than buying in Brazil but it can take three months to receive it because the Chinese will provide the cheapest option available," he said.

To address those issues PayPal is working with its parent company eBay - which it plans to spin off from next year - and others to set up a discount shipping program with a fixed fee allowing a given number of shipments within a 12 month period.

The company is also working with different merchants to put together packages of selected products with a discount shipping rate, exclusive for PayPal customers.

"In exchange for that we promote these merchants' products to our consumers. So it's a give and take relationship," Pelissaro said.

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