Technology

Mobile payment: an emerging trend in Latin America

In a region where millions of people cross borders everyday, new technologies are coming up to address the needs of consumers and businesses

  • For the Mobile Payment market, Latin America’s biggest particularity is its potential for growth.
  • Latin America counts with a large percentage of unbanked or underbanked consumers and online payment services are able to democratize financial services for the region’s population.
  • Recently in Brazil, Airfox launched BanQi, a digital challenger bank that aims to address the disparity regarding access to banking services.

According to the Latin America Online Payment Methods 2019 Report, published by Research and Markets earlier this year, mobile payment is an increasing trend across Latin America. And although credit cards were the preferred method of more than 50% of online shoppers in Latin America in 2018, two in three internet users in the region said they would be likely to use mobile wallets or similar payment methods during 2018/2019.

In a region where millions of people cross borders everyday for work, leisure, shopping and business, new players are emerging with technologies to address the needs of consumers and accelerate commerce. They include digital challenger banks, payment processing firms and mobile payment apps.

In an interview for Mobile Payment Today, Henrik Nilsmo, chief commercial officer at EBANX explained that Latin America’s biggest particularity is its potential for growth. “While both Latin America and the U.S. have similar numbers of online shoppers, in Latin America they correspond to a smaller percentage of the total population.”

Nilsmo also mentioned data showing that among the region’s 650 million people, about 155 million were expected to buy online in 2019. “Online sales are growing about 19% in the region, expected to reach $118 billion by 2021”.

Latin America also counts with a large percentage of unbanked or underbanked consumers and online payment services are important tools, able to finally democratize financial services for an enormous population, as Katie Sedat, vice president of marketing at Airfox, explained to Mobile Payment Today. 

Recently in Brazil, Airfox launched BanQi, a digital challenger bank that aims to address the disparity regarding access to banking services. According to Sedat, the unbanked often lack physical access to critical financial institutions and don’t meet the requirements to open accounts and or access loans. “Digital banking and microlending platforms open new opportunities for the underserved, who do not have access to reliable, egalitarian, non-exploitative financial options”.