I always like to begin my presentation by showing a picture or image that conveys a key point of the presentation. The picture here conveys a woman, in all likelihood from a lower socio economic class probably in Peru or Bolivia using a phone. As she is shielding the phone from the sun, she is probably looking at information on the screen. The information may be related to the merchandise that is positioned in front her. Perhaps she is accessing an app that facilitates payment or inventory management.Images like these are common place in Latin America. The fact is that the region has a mobile penetration of upwards of 90%, and in some markets, such as Jamaica and Argentina, these rates are over 100%. When compared to bank penetration rates of about 60%, the opportunity becomes even clearer: harnessing the popularity of the mobile phone to introduce mobile payments and associated financial products that historically a large segment of the population has not used.
Several drivers are contributing to mobile phone popularity and eventual mobile payment use. From a mobile deployment point of view, the region is primed for commercial solutions due to the strong mobile phone penetration rates and some countries, particularly Brazil, having several variables in its favor for the use of these solutions. Focusing on electronic payments in general, all major payments franchsies, Visa, MasterCard, and American Express, have a strong presence in the region with an equally strong brand recognition. From a sociaeconomic point of view, C, D, and E sectors continue to be exposed to financial products that are more suitable for their needs, such as prepaid cards and community banking services. Perhaps the only question mark is the avialability of communications technologies that can provide a robust mobile payement experience, but this should begin to steadily improve as regulators increasingly look to facilitate state of the art networks and encourage competition among key stakeholders such as mobile operators.