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April 13, 2009

Latin America Mobile Payments Industry Shows Promise
By Susan J. Campbell
TMCnet Contributing Editor

As consumers throughout the world continue to become more mobile, the demand for solutions that allow for more functionality in a mobile world continue to increase. One area showing significant growth is that of mobile payments. According to the Mobile Payments Report: Latin America, revenue is being generated more successfully in emerging markets.

The Latin American market is one that is showing significant promise for growth in mobile payments, but the telecommunications and banking infrastructure necessary to make this service reasonable varies from country to country. Yet mobile subscribers have almost completely overtaken their fixed-line counterparts in every country except Cuba and mobile penetration had surpassed the 50 percent milestone by early 2007.

As the largest country in Latin America, Brazil, together with Mexico, accounts for 51 percent of all mobile subscribers in the region. The Brazilian market is considered to be a good indicator of what will become successful in the Latin American region, although it does tend to highlight those countries that still have a long way to come in terms of mobile penetration and sophistication of networks, devices and providers/users’ acceptance of technologies.

Juniper Research forecasts that revenues for global service providers generated from mobile money transfer services and remittances will surpass $5 billion globally by 2013. This sector represents a significant prospective market for mobile operators, financial services organizations, governments, retailers and end users.

For Brazil, pre-pay mobile phones remain the first choice for consumers and are considered the easiest way for mobile users to add to the minutes on their phone is to enter a shop and purchase a paper voucher or receipt. In the recent past, money transfers were lacking in appeal as they took several days to complete. Real-time banking software is imperative for the success of the mobile payment market in this region.

Although the emergence of mobile technologies and advancements in Brazil have been slower than other parts of the world, they still have been strong for Latin America. As there appears to be a growing demand for strong electronic payment transfer systems, the addition of a mobile payment transfer infrastructure is the next logical step.

With the advancements that already exist in Brazil, it is the logical location for continued investments. The consortium of mobile workers must be able to work together to ensure easy money transfer options are readily available or any technological advancements will mean nothing for users.

The promise in Latin America is great and Brazil could essentially lead the way, setting the pace for implementation and collaboration among regional providers to make the mobile payment industry viable and profitable.  

Susan J. Campbell is a contributing editor for TMCnet and has also written for To read more of Susan’s articles, please visit her columnist page.

Edited by Stefania Viscusi


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