When Wikimedia tries to collect payments in Latin America, it's a mixing two unusual activities. It's a San Francisco-based organization that doesn't have a large presence in the region, and even on its home turf Wikimedia generally doesn't collect frequent payments from consumers.
Wikimedia is registered as a public charity, so it doesn't pay federal or state income tax, and it's funded mostly by grants and donations. In such a case, there's little room for a bad experience, according to Sebastian Kanovich, CEO of dLocal, an emerging markets payment company.
"Keep in mind Wiki is asking users to donate for something they get for free," said Kanovich. "To not offer a payment method that's local and familiar makes it that much harder."
The Montevideo, Uruguay-based dLocal is supporting Wikimedia's fundraising campaign in Latin America by enabling it to collect payments in Argentina, Chile, Colombia and Mexico in addition to its existing market in Brazil. The payment company specializes in emerging markets payments, and hopes to apply that local knowledge to Wikimedia's activities in the region.
Wikimedia, which did not return a request for comment, funds and hosts content through the Wikimedia Foundation. This foundation runs the online encyclopedia Wikipedia, as well as Wikibooks, the video repository Wikimedia Commons, the Wikivoyage travel guide, the online newspaper Wikinews, the animal registry Wikispecies and other similarly themed and branded sites.
The sites are generally crowdsourced. People submit content, which volunteers edit and is hosted for free by the nonprofit organization. Wikimedia operates fundraising campaigns and tests banners in different languages around the world every year.
But in Latin America, it turned to a local gateway to manage the different currencies and user preferences. dLocal offers about 130 different payment methods, and charges a transaction fee similar to that of a credit card transaction.
In Argentina, 84% of donors use credit cards, while in Colombia it's only 38%, according to Kanovich. dLocal connects with Wikimedia in different markets for campaigns that are tailored towards these differences.
"The users aren't seeing something that looks like it was meant for the U.S.," Kanovich said. "When you are offering local payment methods, you are getting nearer to the local population and the end users."
Like a lot of digital payment companies, fundraising and charity is a natural expansion play, since the technology to collect and process payments is already in place via dLocal's e-commerce service, and nonprofits need something straightforward.
"It helps your fundraising efforts if making the payment is as frictionless as possible," said Zil Bareisis, a senior analyst at Celent. "After all, you want the donors to act on their impulsive generosity rather than scare them away with detailed registrations."
In dLocal's case, the lure is familiarity. dLocal's primary offering is designed to allow companies to sell in Latin America and other emerging markets through a single portal to handle foreign exchange, settlement and risk management. In the e-commerce space it has attracted Disney, GoDaddy and more than 100 other clients.