Nicaragua has below-average access to the internet and below-average rates of eCommerce. Consumer market research groups estimate that 45 percent of Nicaraguans used the internet in 2021, most through mobile data plans, compared to a Central American average of 54 percent. Nicaragua has 84 cell phone subscriptions per 100 people, compared to a Central American average of 112 subscriptions per 100 people. The Nicaraguan government can disrupt internet service at any time. During the 2018 protests, the government disrupted internet service in some cities.
Nicaraguan authorities may electronically monitor individuals’ activities. Under Nicaragua’s 2020 Cybercrimes Law, a local judge may issue an order, at the National Police or Prosecutor General’s request, to force internet providers to release specific information about an individual customer, as well as collect, extract, or record data about this customer, such as real-time data traffic.
CAFTA-DR’s Electronic Commerce chapter requires nondiscriminatory, duty-free treatment of digital products and encourages cooperation in numerous policy areas related to electronic commerce. However, electronic commerce is still developing in Nicaragua and there are no laws or regulations restricting its use. All eCommerce businesses must be incorporated with a physical address in the country.
The Digital Signature Law extends legal validity to electronic signatures and digital certificates to facilitate business and government transactions, especially international transactions. The governing body for the accreditation of an electronic signature is the Director General of Technology, which is part of the Ministry of Finance and Public Credit. There is no indication, however, that the system necessary to accredit electronic signatures has been implemented.
Assessment of Current Buyer Behavior in Market
Nicaraguans are increasingly comfortable with online and app-based shopping, though overall rates of eCommerce remain lower than the regional average. According to consumer market research groups, in 2020 Nicaragua’s eCommerce market had a value of $72 million and digital expenditures accounted for 1.6 percent of all consumer spending (compared to 2.2 percent in Latin America). Nicaragua has no legal framework regulating online transactions. While the few businesses offering online transactions generally have reliable security measures, there are no public incentives to conduct online sales and little public awareness or training available. Aside from the business elite, online shopping has not taken hold in Nicaragua.
Nicaragua’s commercial banking system is conservative and highly concentrated, restricting electronic transaction options. According to online marketing experts, commercial banks ask for up to $10,000 in security deposits to guarantee online transactions. Some entrepreneurs use Pay-Pal and other foreign payment systems to avoid high transaction costs, but these systems are not integrated into Nicaraguan banks. App-based delivery platforms, particularly Hugo and PedidosYa have grown significantly, especially in the capital of Managua.
The relatively low purchasing power of the Nicaraguan consumer makes it difficult for many to obtain credit or debit cards for online purchases. Popular app-based delivery services also allow payments in cash. According to the World Bank’s global financial inclusion database (Global Findex), only 23 percent of adults had access to financial services in 2021, down from 28 percent in 2017.