Why Cash on Delivery (COD) Is Key to eCommerce Growth in Latin America

For eCommerce businesses in Europe, Latin America represents one of the most exciting emerging markets. With more than 650 million people and rapidly growing internet penetration, the region offers massive potential for international brands.

But there’s a challenge many European companies don’t anticipate: payment culture in LATAM is very different from Europe or the U.S.. Credit card penetration is lower, and consumer trust in online payments is not universal.

That’s where Cash on Delivery (COD) becomes critical. Far from being an outdated practice, COD remains one of the most powerful conversion drivers in Latin America. In this article, we’ll explain why COD is essential for growth, how it works, and how you can integrate it into your eCommerce expansion strategy.

The Unique Payment Landscape in Latin America

In Europe, digital wallets, debit cards, and instant payments dominate. But in Latin America, the situation is different:

• Credit card penetration remains low in many countries. For example, less than 30% of adults in Mexico have a credit card.
• Banking access is limited: large parts of the population remain underbanked or unbanked
• Trust in online payments is still developing—many consumers prefer to pay when they receive the product.

For European brands, this means one thing: without COD, you risk losing a significant share of potential customers in LATAM.

Why COD Drives eCommerce Growth in LATAM

1. Increases consumer trust

COD allows buyers to verify the product before paying, reducing fears of fraud or non-delivery. This builds confidence in first-time buyers.

2. Expands the addressable market

By offering COD, you reach consumers who don’t have access to credit or debit cards. In countries like Colombia, Peru, and Mexico, this represents millions of additional buyers.

3. Boosts conversion rates

Studies show that adding COD as a payment option can increase conversion rates by 20–40% compared to card-only checkout in LATAM.

4. Encourages repeat purchases

Once customers build trust through COD, many are more willing to try other payment methods in the future.

Common Challenges with COD

While COD is a powerful growth lever, it comes with operational challenges:

• Higher return rates: some customers may refuse delivery.
• Cash handling risks: logistics providers must manage money securely.
• Complex reconciliation: accounting for COD payments requires robust reporting.

Solution: Partnering with a provider that combines logistics, last-mile delivery, and payment reconciliation software is essential. Without this, COD can create inefficiencies instead of growth.

👉 Learn more about the invisible logistics behind every great ecommerce

The Role of Technology and Software

COD is not just about cash—it’s about integrating payments with logistics. European brands expanding into LATAM need software tools that:

• Track COD payments in real time across different carriers.
• Reconcile cash collected with daily reports.
• Integrate with eCommerce platforms like Shopify, WooCommerce, or Magento.
• Provide transparency in delivery performance and customer behavior.

👉 Explore Kiki Latam’s services and software solutions that make COD management seamless for international brands.

Case Scenarios: When COD Makes the Difference

• A French skincare brand entering Mexico: by offering COD, they capture a market of consumers who avoid online card payments, increasing order volume by 35%.
• A Spanish supplement company expanding to Colombia: with COD as an option, they quickly build trust among first-time buyers, reducing cart abandonment.
• A UK fashion retailer launching in Peru: COD allows them to access younger demographics who rely on cash, while building brand loyalty in a new market.

Best Practices for Using COD in LATAM

1. Combine COD with digital payments: always give consumers options but highlight COD as a safe and trusted method.
2. Set clear return and refund policies: reduce risks of rejected deliveries by managing expectations upfront.
3. Use reliable last-mile partners: delivery agents must be trained to handle cash and returns professionally.
4. Leverage data from COD transactions: analyze rejection rates, regions with higher COD usage, and customer behavior to refine your strategy.
5. Automate reconciliation: integrate COD data into your financial systems to keep operations efficient.

👉 Discover how to turn your local brand into a global business and scale faster with COD and other tailored solutions for emerging markets.

Why European Brands Shouldn’t Ignore COD

For many European businesses, COD may seem like an outdated payment method. But in Latin America, it’s a growth accelerator. Ignoring COD could mean excluding up to half of potential buyers in key markets.

By integrating COD with the right software, logistics, and payment management solutions, European eCommerce brands can:

• Build trust with new customers.
• Expand their market reach.
• Boost conversion and repeat sales.
• Scale efficiently in emerging LATAM markets.

Latin America is an exciting opportunity for European eCommerce brands, but entering the region requires adapting to local realities. Cash on Delivery remains one of the most powerful tools to increase sales and gain consumer trust.

The key is to handle COD professionally: with reliable logistics, cash management, and reconciliation software.

👉 At Kiki Latam, we help international brands expand into LATAM with COD, logistics, and digital tools that make the process simple and scalable. Learn more about our services and start your journey into Latin America today.