These are the findings of a recent report from one of the region's largest mobile payment service providers, Upaid. Latin America's history of hyperinflation and the distrust this has left in traditional financial institutions creates its own very specific need for reliable, quick and accessible banking services. Populations are pre-disposed to consider alternatives to banks for services, but equally want to be sure they can trust any new providers.
According to Upaid: "... experience has shown that mobile payments has massive potential in Latin America as, historically, innate distrust in the banking system has encouraged innovation. This means the traditional barriers we see in developed markets, where operators and banks struggle to agree on ownership of the customer, do not exist to the same extent."
This has created a unique opportunity for mobile payments in Latin America where the number of mobile subscribers has overtaken fixed-line counterparts in every country except Cuba. Despite varying levels of development in banking, telecommunications and technology in the region, there is now sufficient infrastructure to support payments and remittance by mobile throughout the region.
According to leading operators in the market, the key factor in the rate of future growth of the m-payment market in Latin America will be the degree to which collaboration increases between the key market stakeholders including handset manufacturers, network operators and banks. Without this m-banking will be less straightforward and consequently more challenging for consumers. This will mean the m-payment mass market is much less likely to take off.
Independent research in Latin America has shown there is clear demand for m-payment and m-banking services from consumers. The country which is generally thought to be leading the market at present is Brazil. Brazil's leading mobile operators and banks currently offer recharge facilities to over 50 million consumers and process over 2 million transactions per month.
As the largest country and economy in the region, Brazil is a reliable indicator of what could become successful throughout Latin America. The rapid growth in access to mobile telecoms in Brazil has created new opportunities to provide secure, low-cost financial services using the local mobile networks. As a result, the ability to transfer funds safely and securely using mobile phones has the potential now to revolutionise the way people in Latin America save, spend and transfer their money. It also represents a significant prospective market for mobile operators, financial services, governments, retailers and end users.