Trending mobile payments in South America
Mobile payments solutions are one of the biggest sections of financial technology (fintech). And in South America, there is a growing trend for mobile payment solutions, as more people turn to their phones for retail payments. With a millennial-rich population, South America is a growing market opportunity for fintech companies to invest in.
Mobile payments are increasing in Latin America
Colombia, Mexico, and Ecuador have already experienced an upsurge in the use of mobile payments, and are fast headed towards a high volume of consumers using these modern payment methods. With this massive market opportunity in South America, mobile payments solutions are continuing to attract a lot of attention from the venture capital community.
Digital purchases are being done on mobiles
In the first quarter of 2016, Linio, South America’s largest e-commerce platform, conducted a survey on the percentage of mobile buyers from the Spanish-speaking countries. The results were remarkably similar in many of the Latin American countries, with between 30 to 35 percent of all digital purchases being done using a mobile device:
- Mexico – 35.6%
- Colombia – 33.8%
- Chile – 33.5%
- Peru – 31.5%
This is no surprise to Linio, who has a huge customer base in all of the the above countries. However, in the remaining Latin-American countries, mobile payment use was limited. In Brazil, a number of users who made digital purchases with a mobile device was a low 18.8 percent. Surprising, since Brazil is leading the South American market in e-commerce and mobile devices. Which means that Brazilians are not set for mobile payments yet, despite 65 percent of the population using smartphones. This agrees with the data from Google in the beginning of 2016, which forecast less than 19 percent of digital purchases in Brazil would be done using mobile devices.
Half of all app sessions are from Brazil and Mexico
To get a better idea of how users in Latin America use their mobile devices, analytics company, Flurry, produced a data report on mobile analytics in the region. Brazil was the top app user in the continent, with more than 34 percent of all app sessions on the Flurry platform originating there. 21 percent of app sessions originated in Mexico, while Argentina produced just 8 percent of the sessions. Once more, this was not surprising, since out of the 189.6 million smartphones used in Latin America, 108 million are in Brazil and Mexico.
Expected increase in tablet use by 2020
Trends are indicating a huge increase in the use of tablets over the next three years. eMarketer, a Latin American marketing analytics firm, have indicated that there were more than 108.8 million tablet users in the region, an increase of 18 percent on the previous year. Strong growth of the mobile tablet market is predicted for the coming years. Tablet use is expected to reach around 122 million users by the end of 2017, and more than 147 predicted users by 2020. An expected increase of almost 40 million users, the opportunity for fintech companies in the region is promising.
Mobile internet users expected to increase dramatically
According to a recent report in The Mobile Economy, Latin America is expected to see an increase of over 150 million mobile internet users by 2020, an increase of almost 50 percent on the current users. With mobile internet becoming cheaper and easier to access, and better LTE capabilities, this is expected to increase the mobile money services in the region. New regulations in Latin America are helping to facilitate an increase in mobile payment use, thanks to the greater mobile access available. There are currently 17 mobile services markets throughout Latin America, with 37 mobile payment solutions providers. Of the 17.3 million mobile money accounts registered across the region, 47 percent are active on a daily basis.
Mobile payments come to Peru
Mobile payments are soon to be launched in the Dominican Republic and Peru by fintech firm, Yellowpepper. With a strong presence in Peru in mobile banking already, they are set to take their Yepex platform into the countries to increase the mobile payment technology available to retailers. Yellowpepper is already working well with Yepex in Colombia, Mexico, and Ecuador, with a growing market in the three countries. The introduction of mobile payment solutions in South America is also causing a leapfrog effect, as it did in Asia, where consumers are jumping straight from cash payment to mobile payment options, and skipping the credit card stage of the journey.
Twenty years ago, most companies dismissed India, Russia, and China as novelties, and focused their payment solutions elsewhere. With China now one of the biggest mobile payment users in the world, the focus in there, while firms are failing to focus on the upcoming markets, such as Bangladesh, Vietnam, Dominican Republic, Ecuador, and Colombia. It looks as if the Latin American countries could be following the example of China, and the fintech firms that get in there first are going to be the ones making the major changes in the region.
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