High-Risk Merchant Accounts in LATAM: How Stablecoins Simplify Onboarding & Integration

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Jul 25, 2025

Latin America’s financial environment is undergoing dramatic transformation, with high-risk merchant accounts in LATAM facing distinctive onboarding and payment integration challenges. The region received nearly $415 billion in cryptocurrency transactions between July 2023 and June 2024, and stablecoins now account for 39% of all purchases on Bitso, a leading regional crypto exchange (Chainalysis, 2024; Cointelegraph, 2024).

For high-risk merchants, stablecoin payment solutions for LATAM businesses offer a path forward that addresses legacy barriers and operational hurdles.

Key takeaways:

High-risk merchants in LATAM struggle with onboarding delays and payment freezes on traditional rails.
Stablecoins cut fees, speed settlements, and reduce chargeback exposure.
API-first integrations replace slow wires with near real-time cross-border payouts.
Regulatory compliance remains critical—merchants must maintain strict KYC/KYB controls.

What Makes a Merchant Account ‘High-Risk’ in LATAM?

It’s a question nearly every fintech and merchant faces: why are some industries in Latin America deemed “high-risk” by payment providers?

The real answer centers on sectors that are prone to chargebacks, fraud, or regulatory scrutiny. Online gaming, adult entertainment, travel services, and certain e-commerce platforms are categorized as high-risk due to higher transaction volumes and increased fraud potential. In markets like Argentina and Brazil, online gambling, adult entertainment, high-ticket e-commerce subscriptions, and travel agencies face heightened scrutiny from both local payment service providers and regulators.

For example, Colombia’s adoption of new payment methods—where bank transfers have overtaken credit cards—reflects changing dynamics that can increase risk exposure (en.wikipedia.org). Brazil’s central bank has indicated that stablecoin-based payment schemes may soon be brought under formal oversight, increasing compliance obligations for merchants in these categories.

In Brazil, the central bank notes that roughly 90% of crypto flows are linked to stablecoins, which are often used to bypass traditional regulatory channels (Reuters, 2025).

What really matters is that high-risk merchant accounts LATAM are often subject to more stringent onboarding and monitoring, driving demand for alternative payment and settlement solutions.

For a deeper dive into the evolving needs of these merchants, see why high-risk PSPs in Colombia and Mexico are switching to stablecoin APIs.

Why Traditional Onboarding Fails High-Risk Merchants

Traditional onboarding processes for high-risk merchants in Latin America can be painfully slow, riddled with compliance hurdles, and prone to rejection. Legacy banks and payment processors frequently flag these industries for enhanced due diligence, leading to delays and higher operational costs.

Traditional channels can also freeze merchant accounts or delay settlements without warning, directly threatening business continuity.

Simply put, onboarding friction can be a dealbreaker for high-risk sectors.

The region’s complex regulatory environment and the shift in preferred payment methods—such as the rise of bank transfers over credit cards in Colombia—add to these onboarding challenges (en.wikipedia.org).

For a closer look at how traditional payment methods compare, explore stablecoin vs traditional payment networks for LATAM businesses.

How Stablecoins Transform Onboarding & Integration

Forget the pain of delayed settlements and high rejection rates. Stablecoin payment solutions are redefining the onboarding experience for high-risk merchants in Latin America.

Here’s how stablecoin payment integration stands out:

Substantially lower transaction costs: Remittances via stablecoins can reduce fees from about 6% to well under 1%, and support informal or unbanked workers across LATAM.
Faster, cost-effective transactions: In 2024, stablecoins accounted for 39% of all purchases on Bitso, reflecting a 9% year-over-year increase (Cointelegraph, 2024).
Simplified compliance and cross-border access: 71% of LATAM institutions use stablecoins for cross-border payments, streamlining operations and regulatory checks (Fireblocks, 2024).
Lower chargeback and fraud risk: Crypto transactions are final, reducing the risk of costly chargebacks—a frequent pain point for high-risk categories.
Automated compliance: Stablecoins can also leverage programmable smart contracts to streamline KYC, AML, and real-time audit trails.

The bottom line: Stablecoins deliver speed, efficiency, and compliance, making them a powerful tool for high-risk merchants.

For insights into the nuts and bolts of stablecoin payment integration, see top stablecoin APIs for Colombian fintechs.

Step-by-Step: Integrating Stablecoins into High-Risk Merchant Systems

Here’s how the payment integration stablecoins process actually works for high-risk merchants in Latin America.

Partner with a payment service provider (PSP): Choose a PSP experienced with stablecoins and regulatory compliance. Leading regional providers like Bitso Business and Nuvei now offer SDKs and APIs tailored for cross-border stablecoin settlements.
API integration: Implement the provider’s API to enable stablecoin payments within your platform.
Compliance setup: Establish KYC, KYB, and AML policies from day one to meet local regulations.
Staff training: Ensure your team understands crypto transaction flows and compliance requirements.
Ongoing monitoring: Use webhooks and real-time tracking to monitor payment status and flag anomalies.

Pro Tip: LATAM institutions adopting stablecoin integrations have reported streamlined cross-border transactions and improved cash flow (Fireblocks, 2024).

For a real-world integration walkthrough, check out our API integration process guide.

Bottom line: Streamlining these steps can transform onboarding from a bottleneck to a competitive advantage.

Emerging Trends: Stablecoin Payout Automation & Treasury Management

Beyond onboarding, high-risk merchants are adopting batch payout automation to distribute hundreds of transactions in minutes. Holding USDC or USDT in a multi-currency wallet also creates a basic stablecoin treasury that shields operating cash from local currency swings. Together, these trends turn stablecoin rails into a strategic liquidity tool rather than just an alternative settlement method.

Real-World Proof: Case Studies from LATAM

Latin America’s stablecoin momentum is more than a trend—it’s a proven solution for high-risk merchants. For example, 71% of financial institutions in the region now use stablecoins for cross-border payments (Fireblocks, 2024).

Bitso processed $43 billion in US-Mexico remittances in 2024, while MercadoLibre launched its own dollar-backed stablecoin in Brazil, showing how both specialist and mainstream players are moving to stablecoins at scale.

A notable operational example: In 2023, Reserve Protocol’s RPay app—once a leading stablecoin solution in Argentina, Venezuela, and Colombia—faced operational setbacks after losing its USD banking partner, leading to suspended withdrawals and a rapid drop in active users (Axios, 2023).

This underscores both the high adoption and the risks of integration, emphasizing the need for strong infrastructure.

For more on stablecoin adoption in the region, explore Colombia vs Mexico: Which Country Is Winning on Stablecoin Adoption?

Navigating Compliance and Regulation in LATAM

Expert Insight: Navigating the compliance landscape in Latin America requires constant vigilance. In May 2025, Brazil’s central bank publicly raised concerns about the growing use of U.S. dollar-backed stablecoins for international transfers, highlighting that 90% of crypto asset flows in Brazil are tied to stablecoins (Reuters, 2025).

Requirements can include strict KYC/KYB onboarding, real-time tax reporting, and pilot programs like Colombia’s regulatory sandbox.

LATAM regulators may look to the EU’s MiCA framework—which requires 1:1 reserve backing and bans algorithmic stablecoins—as a reference for future policy.

What does this mean for high-risk merchants? Regulatory scrutiny is increasing, and compliance with local AML, KYC, and licensing requirements is non-negotiable.

For a full compliance checklist, visit our USD virtual accounts for Mexican exporters compliance checklist.

Counterpoint: Challenges and Red Flags for Stablecoin Integration

It’s tempting to believe that stablecoin integration is a silver bullet for every high-risk merchant challenge. But there are real risks: changing regulatory frameworks, operational instability, and compliance pitfalls. Staying compliant is especially challenging for businesses operating across borders, given varying AML/KYC standards and unclear tax obligations in each country.

A case in point: Reserve Protocol’s RPay app had to suspend local currency withdrawals in six countries, including several in Latin America, after critical banking partnerships were lost (Axios, 2023).

This highlights the vulnerability of stablecoin solutions to banking and regulatory shocks.

The smart move? Stay vigilant on regulatory changes and prioritize strong compliance.

For a live regulatory checklist, see stablecoin compliance checklist for Colombian PSPs.

The Future of High-Risk Merchant Payments in LATAM

The region’s future is digital. The Latin American digital payments market is projected to triple to about $300 billion by 2027, with e-commerce sales expected to exceed $260 billion by 2028 (en.wikipedia.org).

LATAM fintech solutions and cryptocurrency adoption LATAM will continue to drive innovation for high-risk merchants.

As much of the region remains unbanked but increasingly connected via smartphones, stablecoins will play a growing role in turning mobile devices into financial tools for millions.

Key takeaway: The momentum behind stablecoins is only increasing—high-risk merchants who adapt now will be best positioned for future growth.

For more on fintech innovations, visit Mexico based fintech companies that are transforming finance.

Interested in digging deeper? Talk to the Mural Pay team about pilot projects or access our developer sandbox to test stablecoin payouts firsthand.

FAQ

What qualifies a merchant account as high-risk in Latin America?
Payment providers view industries with elevated fraud or chargeback rates—such as iGaming, adult content, and travel—as high-risk merchant accounts LATAM. These sectors typically process high volumes, cross borders frequently, and attract additional regulatory scrutiny.

How do stablecoins speed up settlements for high-risk merchants?
Stablecoin rails clear in minutes rather than days, letting merchants access working capital sooner and reducing exposure to FX swings.

Are stablecoin payments compliant with local regulations?
Yes—provided merchants perform KYC, KYB, and follow AML guidelines. Most regulators allow stablecoins when they are fully backed and transparent, but reporting requirements can vary by country.

How difficult is it to integrate stablecoin rails with existing payment stacks?
Modern APIs can slot into current workflows with minimal code changes, and leading providers supply SDKs, webhooks, and detailed docs. For many teams, deployment happens in weeks, not months, making LATAM fintech solutions more adaptable.