The ability to provide businesses with more ways to accept digital payments is critical globally, but the specific needs of merchants typically differ based on geography.
In recognition of those nuances, liquid has been working for two years to build a payment infrastructure to modernize access to payments for companies in Latin America. And today, the company is emerging from stealth to offer what it describes as core payment services that “serve a broad range of needs and customer preferences … through one unified and integrated API.”
Interestingly, while many companies in the US start out serving customers in their home countries and later expand into LatAm, Mountain View, California-based Liquido started out specifically to serve the LatAm market. To date, it has processed more than $300 million in payments through a closed beta with several consumer brands in the region ($20 million of that was processed in the first two quarters of 2022), and now says it is ready to open access to cross-border and local traders across Latin America.
Digital payment via credit cards is very common in the US, but in LatAm, where an estimated 28% even have credit cards, that is much less the case. And even among those who do use credit cards, fraud is quite common. Still, the Transaction value of digital commerce in Latin America was estimated to exceed $100 billion in 2019 and is expected to grow about 73% by 2025, according to Statistical. Basically, Liquido wants to make it easier for people to buy things online. With Liquido, the startup touts that companies can accept and process “all forms of payment” — from credit and debit cards to wire transfers to digital wallets and even cash — to increase payment acceptance rates.
“Between working at Uber and DiDi, I devoted several years to the LatAm market, and I was struck by the prevalence of cash payment for rides,” said Shanxiang Qi, co-founder and CTO of Liquido. “This observation led me to the conclusion that even the middle and upper echelons of society in the region did not have easy access to digital payments, which ultimately limited opportunities for businesses.”
Qi teamed up with MK Li, a former VC who started his career as a product manager at Google and Microsoft.
The pair say with Liquido that they are building something in LatAm “similar to what Stripe has built in the US”, but also expand from traditional payments to comprehensive payment services.
“A company like Stripe or dLocal could work for the market right now, but it doesn’t offer the same level of seamless experience as in Europe and the US,” he told australiabusinessblog.com in an interview. “Their infrastructure is very different. And there are also many silos of different payment channels. And the users also have different preferences about payments and risk profiles. The fraud profile in the local market is drastically different.”
To help curb fraud, Liquido says it’s built something called a “Payment Success Booster,” which does things like run customizable fraud flagging and transaction blocking, WhatsApp payment recovery, flexible payment method switching, and smart routing and retry.
The company says it also has a Payment Plus Platform (PPP), which runs on top of its core payment services and is designed to “create customer experiences tailored to local markets and grow within verticals.” The company now has the first offering for its PPP, something it calls the “WhatsApp Liquido-Store”. It allows merchants to create “a mini Shopify-like storefront within WhatsApp” without any coding knowledge, they say, giving customers a way to search, find and buy merchants through WhatsApp, which is by far the most widely used social network in latin. America.
Liquido says it also offers alternative solutions to help companies make payroll payments and to pay suppliers and related businesses through wire transfers. Now the company is proceeding with payments.
The 2021 startup raised $26 million in funding in two rounds, both led by Index Ventures. Other lenders include Base Partners, Restive Ventures, Mantis VC and UpHonest Capital.
“Shan and MK tapped into payments in a part of the world ripe for disruption,” said Mark Fiorentino, partner at Index Ventures. “Based on their previous work, they each brought an in-depth understanding of the issues and developed one of the most sophisticated, yet practical, payment systems to be found anywhere in the world.”
Fiorentino is impressed with the evolution of the company’s offering over time, especially the addition of the WhatsApp Liquido store.
“There’s an interesting opportunity to help increase conversion rates and LTV per user,” he said. “So all of a sudden this isn’t just a payment company, but more like payment software in a way that owns more of the value chain for monetization and cost reduction.”
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