Mobile payment transaction value expected to witness strong growth in Latin America

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Latin America is a market with heterogeneous opportunities across different countries as is the case with European countries. Though mobile payments are not dominant in the region, majority of user base comes from Columbia and Ecuador. Smartphone penetration rates in Mexico, Brazil, and Columbia are approximately 38%, 33%, and 24%. Consumers are now more open and willing to e-commerce and mobile payments. It is also estimated that around 82% of millennial consumers in Mexico use their mobiles for banking.

During the Rio Olympics in Brazil in mid-2016, Visa launched digital payments in the country including launching its first payment ring that was offered to Team Visa athletes.  The payment ring enabled athletes to purchase by tapping their ring against any NFC-enabled terminal. One month prior to the start of Olympic Games, Samsung launched Samsung Pay in Brazil. The company also partnered with various local banks in the country to expand user base.

In December 2016, BBVA acquired Mexico based online payments startup firm Openpay so as to bolster its online payment services and enhance customer experience. Openpay’s platform enables users to make card, cash, bank transfers, and loyalty point payments.

Founded in 2004, YellowPepper is headquartered in Boston and provides mobile payment services in Latin American countries. The firm primarily focuses on customers with credit or debit cards in Mexico, Columbia, Ecuador, and Peru. With over $44m in investment, YellowPepper intends to expand to other LATAM countries. Yepex wallet is an Android and iOS based wallet that allows users to store their card information in the app and perform transactions using a secure PIN or token. While other domestic competitors such as Pademovil and Mobilcard offer mobile payment services to the unbanked, YellowPepper targets the banked population in the region. With a team of around 70, YellowPepper has partnerships with leading banks and financial institutions such as FIS and Mastercard. The firm aims to take on its competitor PayPal.

The Brazilian mobile payment market is expected to record a CAGR of 28.6% from 2017-2021 to reach US$ 81,277 million in transaction value terms by 2021, increasing from US$ 29,745 million in 2017. In 2016, the market registered a growth rate of 42.4% over 2015, to reach US$ 21,490 million.

The Mexican mobile payment market is expected to record a CAGR of 68.8% from 2017-2021 to reach US$ 1,91,012 million in transaction value terms by 2021, increasing from US$ 23,505 million in 2017. In 2016, the market registered a growth rate of 68.3% over 2015, to reach US$ 12,959 million.

To know more and gain deeper understanding of mobile payment industry in Brazil (click here) and Mexico (click here).