Why is Nicaragua stuck in the e-commerce Dark Ages?

E-commerce is supposed to help small businesses become more competitive. But in Nicaragua, the little guy is getting boxed out. Second in the series: ‘Challenging Innovation in Nicaragua’

Growing a business in Nicaragua is hard. Growing a business online should be easier. But put the two together here, and it’s damn near impossible.

If you are reading this blog online, you have probably purchased products or services on the internet. Chances are you have entered your credit card into a website and received a physical product in the mail or a digital product in your email inbox. Now, imagine a world where only big businesses could sell online and the small players were forced to stay small and stay offline. Imagine no more — because that’s the world we are living in here in Nicaragua.

The turbulent launch of the past few weeks

Considering all of this, my team and I at Marca Labs, a technology company based in Managua, got to work. We recently launched an online ticketing platform to make Nicaragua a little bit more interesting and wonderful for all of us. The company is a type of Ticketmaster for Nicaragua, if you will. There are other similar websites out there in Nicaragua already, but we felt strongly enough about the market need to jump in and add our own effort.

We took the leap knowing that the Nicaraguan market needs a way to purchase online but also a way to better connect with worthwhile experiences. You may not be too aware of this, but there are plenty of cultural events of interest happening around us that we don’t attend for very simple reasons:
a) We weren’t aware of them
b) Paying for tickets here is a hassle

If we fixed those two problems, would Nicaraguans be inspired to experience more? We think so.

I can’t tell you how many times I’ve wanted to attend more cultural events around town, like those held at the Rubén Darío National Theater. I always have all the intention in the world of going to the theater and experiencing Nicaragua’s wonderful culture except…I’m just too lazy to drive halfway across the city to find out if there are still tickets available.

With these pain points in mind, our team of technicians got to work on creating something to help people connect with the amazing experiences Nicaragua has to offer. And it worked beautifully — until we got blocked out.

The problem wasn’t the technology. Our team worked weekends to put together a beautiful design and a working shopping cart for the website. It worked great, and the live chat feature we installed at the last minute turned out to be wildly popular.

People were turning to the website to purchase concert tickets that they wanted so badly, and they trusted us to get them their tickets in a quick and secure manner.

The problem wasn’t the strategy. The traffic the website received within the first few days surprised me, and I met rave reviews at every turn. Our website visitors wanted experiences, and we were happy to bring them those experiences — with just a few clicks.

Event organizers were also interested. Keeping track of payments is always a pain point for them, and outsourcing all of that to a single platform with solid reports and a secure paycheck at the end of their event was received like gold. Both event-goers and event-organizers wanted help — help that we were eager to provide.

Sadly, the problem is processing payments—namely, the lack of options here. While online sales are flourishing exponentially in the US and across the globe, Nicaragua is still stuck in what seems like the Middle Ages. There’s only one bank that processes online payments within Nicaragua, and it requires a hefty monetary deposit to get started. For a small business like mine, that kills the balance sheet.

So, what did we do? We tried the US…and that was another giant failure. We registered a company in Florida, set up an account with a payment processor in the US, and programmed our entire site to receive payments from this company. That band-aid solution didn’t last a week.

Payment processors struggle with the legal implications of selling to Nicaragua, and we got blocked out a short while after the first few credit cards went through. Companies like Paypal won’t touch Nicaragua with a stick because of the risk of money laundering and all of the legal problems that come with it.

What are the implications for the future?

What this means for the Nicaraguan business community is a scary reality to face. We are living in a time in which I can buy cell phone minutes directly from my iPhone in less than one minute (absolutely magical), but I can’t buy a portrait from a painter in Granada unless I get in the car and physically drive there.

Getting small businesses onto the internet removes so many of the barriers we have faced for centuries, but, in Nicaragua, the chances of that happening feel smaller every day.

My startup has spent a ridiculous amount of time trying (and failing) to get into e-commerce. We have researched the options and asked every person we think might help. The answer is always the same: “You’re limited to Nicaraguan banks.”

If we were providing a service nobody cared about, the loss of our service would be okay. But the public is interested in our project and wants options to make online payments in Nicaragua. So why aren’t we being allowed to improve the situation?

Back to square one. Our only hope is the one payment processing solution that Nicaragua offers. In this case, the technology can’t save us, and neither can savvy business strategy. The success of our project — and the projects of many others — hinges completely on the options the country offers.

Here’s to hoping it all works out for online payments in the future. The opportunity and growth of Nicaraguan businesses depend on it.

Marcella Chamorro recently released a book on authenticity in marketing, titled To Be or Like to Be, and she also writes for her blog on lifestyle & marketing. She is a blogger, speaker, and consultant based in Managua, working on developing technologies to help people be more creative. Marcella writes the column ‘Challenging Innovation in Nicaragua’ for The Nicaragua Dispatch

  • jimmycoffee

    Surely you´re not suggesting for one moment that everything to do with money, the movement of money, space or encouragement of business initiative and/or the likelihood of business success is a rigged game in Nicaragua?……
    Surely not?!

    • http://www.marcellachamorro.com Marcella


  • http://www.aquagoggles.com Me too

    Hope you succeed in arranging necessary payment processing!

    My wife and I purchased a home in Granada over a year ago because the place and people are lovely. Since I’m not yet fully retired our stays are limited but at least internet allows me to keep in touch our Canadian business activities.

    What I’d like to be able to do is move either some of our internet business down to Nicaragua or set up one that could be run from Granada.

    Yes shipping by parcel post/mail from Nicaragua would work, actually less expensive than mailing to US from Canada. Hiring one or two full time good people in Granada likely not a problem either. Paperwork in setting up a pain as you discussed previously but good lawyer in Granada and existing Bank connections makes that possible too. (Once upon a time I was a Bank Manager myself).

    What’s left? The wall you hit when trying to arrange payment processing from US Customers and getting it to Nicaragua. OK, I could work around this by setting up Canadian Company to make the internet sales and pay Nicaraguan Company for ‘fulfillment’ out of Granada. However that does have adverse tax consequences and of course most businesses in Nicaragua can’t make this kind of arrangement.

    Nicaragua is being locked out of generating some quality jobs (or their own business) for educated young people for the reasons you have so clearly illustrated.

    • http://www.marcellachamorro.com Marcella

      You’re right, it’s very complicated and the tax implications dwindle profits so much! It’s a shame, but there must be an initiative (albeit informal, like this one) to raise awareness and try to get some changes implemented somehow. It may be a slow process, but if the market shows demand, the banks & powers that be might perhaps make things a bit easier for us…

  • Rachel Greenwood

    Nicaragua is making some progress. When I moved here nine years ago, one had to be home when the meter readers came around from Union Fenosa and Enacal, or leave your payment with the neighbors to pay when the “caja movil” truck came through a week or so later. If you missed them you had to go to their office to pay, and for me in Camoapa that meant spending half a day going to Boaco or Juigalpa. The idea of mailing a check, never mind paying online, was totally alien. I still have to go out and pay in person, but now I can pay at any bank.
    Slow progress, but progress nonetheless.
    Rachel Greenwood

    • http://www.marcellachamorro.com Marcella

      Progress is definitely positive, but I would like to see more small businesses being able to connect with more consumers online — not just Enacal and the bigger companies, right?

  • https://www.tuNicaragua.com Fernando Medina

    It’s not easy, but it can be done. We are currently processing credit/debit transactions for our websites, https://www.tuNicaragua.com, https://www.tuElSalvador.com and https://www.tuGuatemala.com. Our sites, provide a variety of goods and services that can be delivered to people in Nicaragua, El Salvador and Guatemala purchased by anyone anywhere in the world.


    ps. if you wish you can pay your utility bills online, you can use our sites :-)

    • Anonymous

      Mr. Fernando, you should also post about the great connections you have in the Nicaraguan bank industry. Otherwise…

    • http://www.marcellachamorro.com Marcella

      Are the *majority* of purchases/credit card transactions coming from the US or from people in Nicaragua? That is the main difference.

      • https://www.tuNicaragua.com Fernando Medina

        The majority of transactions are International cards for sure, but we are also now receiving a significant number of local transactions. This trend seems to be growing, btw…

  • http://www.creditrich.net marc augustine

    have you tried world pay?
    I had this problem when I was setting up an online ecommerce site for my home country of Trinidad and Tobago and wepay was the only solution that I came up with that worked smoothly..

  • OEstrada

    Sounds like a business opportunity to me if you can get pass all the corruption.

  • http://www.primitivista.com Juan José Bautista

    It is hard to build a business in Nicaragua, because of the poor access to information. Here, you have to become a detective finding clues until you get to the right people that gives you the info.

    It took me 2 months of research before I could register my business. If I do it again I will just take 1 week or less, because now I know the process and the things you have to do. Some people can get surprised about the easy that is. eRegulations (http://nicaragua.eregulations.org/) is doing great job trying to publish and uptate the information about regulations in Nicaragua.

    It is also true that e-commerce can not be completed easily because the final step of e-payments is hard to have it. It took me about two years figuring out how to make payments feasible being a Nicaraguan. My solution was visiting the US, opening a bank account with my ID and Passport, and linked it to a Paypal account. For now, this is my solution you can check it out at http://WWW.PRIMITIVISTA.COM, a dot com company that I founded on Dec 2011, about exporting primitivist paintings from Nicaragua.

    There are option out there, much more less than the developed countries have, such as Paypal, 2CheckOut, ClickBank, etc.


    Thanks for sharing.

    Good luck!

    • http://www.marcellachamorro.com Marcella

      Yes, these are all viable options — if and when the majority of your customers are not *in Nicaragua*. If you are selling TO NICARAGUANS all the time, Paypal, Stripe and others will not permit you to use their platform.

      • John P Henderson

        Have someone contact me via the net. Help is on the way!

  • John Shepard

    I also accept CC payment from customers around the world using PayPal’s virtual terminal. The advantage to me is the ability to be paid for my work anywhere I happen to be in the world. All I need is an internet connection.


    The service costs more than it might: $30 /month for the Virtual Terminal application; and 3% on the transaction. At another “bricks and mortar” business I have our CC terminal “leases” for $19 /month, and we pay some number under 2%, less if we have the card to swipe, more if we enter a customer’s card number manually.

    I assumed that I would be able to use this system to do business in Nicaragua. To get PayPal to work the way you want there is some “verification”, and this year for the first time PayPal is insisting on a tax id number and plan to issue a 1099 if the payments to the account exceed $20K.

    My experience has been that opening a bank account in the US is the easiest of any country (as is setting up a business entity). In some states it only takes a few hours to do both.

    Good luck on your business. The mark of a successful entrepreneur is finding ways around the obstacles thrown in your path. Nicaragua is not a level playing field and probably never will be. And the country still has that socialist suspicion of anyone successfully making a buck But, there are many unfilled needs and opportunities, and the market continues to grow slowly.

  • http://thebigmozey.com John Wilson

    Just curious. Have you talked to BAC?
    It seems they are based in the USA, but have branches through out Central America.
    I would find it difficult to believe that Nicaragua is the only one having online payment problems.
    Might want to suggest to them that they could be a unique niche to help all countries in Central America by starting and e-commerce bill acceptance site.
    Pellas is a smart man, and does not miss out on to many chances to make money!
    (BAC is bank central america)
    Like I said, just a thought.
    Love to hear more about your progress.

  • http://thebigmozey.com John Wilson

    I believe Amazon accepts payments from Nicaragua – Not positive about that, but you might want to check it out.

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  • Friend

    Hello Marcella,

    I live in Florida, and I am interested in finding a way to improve Nicaragua’s e-Commerce. My career is in Information Technology and I am familiar with online payment processing. I have some resources here and in Nicaragua that might be beneficial to the Nicaraguan community. Please contact me at the given email address. I have some questions and I hope you could give me answers on where to begin.


  • http://opwr.org Kevin Shea

    PayPal “virtual terminal” does appear to work. here is there link for countries supported. https://cms.paypal.com/us/cgi-bin/?cmd=_render-content&content_ID=developer/e_howto_api_nvp_country_codes

  • http://barneyrugama.daportfolio.com Barney Rugama

    Hello Marcella… I know a little about this, it´s hard but I definetly found another way… Payoneer.com … I do some freelance jobs in Odesk and like everyone the first choice was paypal to make withdrawals, but din´t work out.. so I found payoneer, is a debit card they sent via Odesk, but maybe you can try and work directly with them, they have business agreements and they are very serious on this. I use the card on BAC´s ATM or I pay directly with it, obviously with a commission but at least I can get my money. Let me know if this worked for you.

    Best regards…

  • Giovanny Medrano

    Hello Marcela, I just found this post and i understand what you feel. Right now i am working in a company that provides E-Commerce service with the online payment includes (we use BAC POS). We already provide this service to many small business and they are selling their product or service online. If you want i can give you more information and help you to develop your online business. you can contact me: giovanny.medrano@alfa.com.ni 505-8768-0886.

  • Michelle

    Have you tried MPESO? It’s only a couple of years old, but it seems to be a viable way for Nicaraguans to complete electronic payments.

  • Ana Malpartida

    Puedes abrir una cuenta con el BAC San José y usar esa cuenta para PayPal porque PayPal sí ofrece servicio de pago “a” Costa Rica (y no sólo servicio de pago “desde” Costa Rica). Luego transfieres el dinero a una cuenta con el BAC Nicaragua mediante la Sucursal Electrónica que es un servicio que permite hacer transferencias por Internet.

  • mike

    Paypal USA tells me I can opt for the transfer to family and friend in my account here, open an account in my own name while actually in Nicaragua listing myself as a friend, and tranfer fund fee-free. Is this untrue?

  • http://support.jobsiteapps.com billmjr

    Is there a concesus on this issue a year after the initial post? I’ll be in Nicaragua in 3 weeks and would love to know if a solution was found.