Globally, ecommerce saw massive growth during the Covid-19 pandemic, and since then the momentum has largely continued. This is especially evident in South America, where rising rates of smartphone ownership, internet penetration and mobile banking are fuelling the market.
Colombia’s ecommerce industry is booming, with more than 21 million citizens of the South American nation buying goods online in 2024, that’s more than three-quarters of all internet users in the country. Projections from Statista show that the number of ecommerce users in Colombia will grow to over 28 million by 2029.
Source: Statista
In 2024, the ecommerce market in Colombia reached 52 billion USD according to PCMI, and is projected to reach 81 billion USD by 2027, at a compound annual growth rate (CAGR) of 16%. It’s now the third largest ecommerce market in the continent behind Brazil and Mexico.
Credit cards are the most popular payment method in the Colombian ecommerce space (43% of sales volume), followed by bank transfers (34%) and debit cards (6%), while digital wallets make up 5% of overall sales volume. A massive 87% of these transactions are made via smartphones, according to PCMI.
This growth represents a massive opportunity for innovative ecommerce brands, payments providers and other financial institutions. If any further encouragement were needed it’s the younger generations of shoppers, aged between 25 and 34, that are the most active. This suggests that the current momentum will have longevity and isn’t just a flash in the pan.
But while opportunities abound, so do risks. Across LATAM, digital channels are being widely used by cybercriminals to commit fraud. In fact, more than half (51%) of all fraud is digital and 44% of retailers in the region are facing a significant problem with cybercriminals creating fraudulent accounts by using stolen or fake identities.
This is why technological innovations such as tokenization, numberless cards and virtual cards are so vital to keep the Colombian ecommerce market safe.
Standard payment cards have sensitive information such as the card number and CVV printed on them, so if they are lost or stolen, criminals can easily harvest the data. Numberless cards don't have sensitive card details printed on them, instead, customers access their card information securely through banking apps. This eliminates the risk of fraud by misuse.
Further to this, the principle of tokenization makes digital payments more secure by replacing card numbers with unique tokens that cannot be reverse-engineered, meaning they are useless outside the specific transaction they are generated for. Virtual cards can generate a new card number for each transaction or every merchant, meaning it's impossible for them to be used without authorisation.
Paymentology’s card issuing services mean that all financial institutions and other organisations can stay safe from fraud. From challenger banks entering new markets to fintechs scaling rapidly, Paymentology’s numberless cards, virtual cards and tokenization support a wide range of use cases, meeting both user expectations and compliance demands.
If you want to find out more about how Paymentology can help your organisation ride the ecommerce wave in Colombia, get in touch today.