Mobile Payments in Latin America

Mobile Payments
in Latin America
White paper by Fortumo
Introduction
This white paper gives an overview of the mobile payments landscape in Latin America. It covers 7 of the biggest
countries in the region by population: Brazil, Mexico, Colombia, Argentina, Peru, Venezuela and Chile.
Latin America has one of the world’s fastest
growing smartphone markets in Brazil.
Content consumption on mobile devices is
also skyrocketing, illustrated by the growth
of both mobile ad spend and internet usage.
Traditionally carrier app stores and value
added services such as ringtones and
wallpapers have been very popular here
and this usage is moving over to
smartphone apps and services.
On the other hand there is a significant gap
between smartphone ownership and
payment card ownership - merchants are
not able to generate revenue from a
majority of the users browsing their content.
This means mobile payments are an
excellent fit to capture the growing revenue
from the Latin American digital content
ecosystem.
Markets Overview
Country
Population
(millions)
Smartphone
penetration
Credit card
penetration
Median
age
GDP per
capita ($)
Digital gaming
spend (2014)
204.5
66.3%
32%
30.5
16,096
$1,515 M
Mexico
121
62.6%
17.8%
26.7
17,881
$990 M
Colombia
48.2
60.9%
13.7%
27.6
13,430
$225 M
Argentina
43.1
52.6%
26.6%
30.3
22,582
$675 M
Peru
31.2
51.0%
11.7%
26.4
11,817
$135 M
Venezuela
30.6
Unknown*
21.5%
25.8
17,695
$225 M
Chile
18.0
66.3%
28.1%
31.7
22,971
$315 M
Brazil
*Unknown (mobile phone penetration at 98%)
Fortumo’s Latin American white paper gives a high-level overview of the biggest markets in the region as well as insights on the carrier billing landscape,
user spending behaviour, device preferences and localization. The data presented is from web payments (desktop & mobile), Fortumo’s cross-platform
payment solution and in-app purchasing SDKs as well as external public sources of information.
Mobile Payments in Latin America
Carrier billing landscape
in Latin America
Country
Carriers &
Market Share
Maximum
transaction size
Spending limits
per month
Payment types
available
Brazil
Vivo (30%),
Claro (25%),
TIM (27%),
Oi (18%)
9.99 BRL
(~$3.25)
339 BRL
(~$110)
One-off payments,
recurring payments
Mexico
Telcel (80%),
Movistar (7%),
Iusacell (7%),
Nextel (6%)
50.44 MXN
(~$3.25)
1,500 MXN
(~$97)
One-off payments,
recurring payments
Colombia
Claro (61%),
Movistar (26%),
Tigo (13%)
3,596 COP
(~$1.5)
50,000 COP
(~$20.8)
One-off payments,
assisted subscriptions
Argentina
Movistar (31%),
Claro (35%),
Personal (32%),
Nextel (2%)
12 ARS
(~$1.35)
300 ARS
(~$33.7)
One-off payments,
assisted subscriptions
Peru
Movistar (60%),
Claro (35%)
4.96 PEN
(~$1.57)
148.8 PEN
(~$47.25)
One-off payments,
assisted subscriptions
Venezuela
Movistar (40%),
Movilnet (30%),
Digitel (30%)
19.05 VEF
(~$3)
1,905 VEF
(~$300)
One-off payments,
assisted subscriptions
Chile
Movistar (34%),
Entel PCS (46%),
Claro (20%)
900 CLP
(~$1.46)
54,000 CLP
(~$87.9)
One-off payments,
assisted subscriptions
User Spending Behaviour
in Latin America
Spending behaviour in Latin America differs
significantly between countries as well as
platforms. In terms of transaction volumes for
carrier billing, Brazil, Argentina and Mexico are
the countries where the payment method has
seen the biggest uplift. It’s also interesting to note
that for most countries, user spending is bigger on
the web (e.g. social networks, streaming services
and games) than inside mobile games. This can
be attributed to web services being
cross-platform, giving users better access to
payments - regardless of whether they’re on their
home computer, using a smartphone on the city
street or somewhere else.
Brazil is by far the most valuable market for digital
content merchants - not only because of the
biggest audience but also due to user “stickiness”
- the average user in Brazil tends to spend more
money and make more payments than in any
other Latin American market.
Mobile Payments in Latin America
Web Payments
In-App Payments
(6 months average, October 2014 - March 2015)
(6 months average, October 2014 - March 2015)
Avg transaction (USD)
Brazil
2.17
Mexico
1.52
Colombia
1.52
Argentina
1.27
Peru
1.57
Venezuela
0.07
Chile
1.46
Avg transaction (USD)
Monthly ARPPU (USD)
Brazil
2.09
Mexico
1.46
3.07
Colombia
1.52
2.91
Argentina
1.06
Peru
1.41
Venezuela
0.07
Chile
1.46
11.4
4.3
1.96
0.33
3.45
Monthly ARPPU (USD)
4.19
3.34
2.86
3.48
1.69
0.25
3.46
Platform Preference
in Latin America
The majority of payment traffic in Latin America originates from mobile
devices: this means digital content merchants need to go mobile-first with
their services in the region. Still, a sizeable amount of traffic is also coming
from desktop users who should not be forgotten. Fortumo also sees a lot of
end-users making payments with the same merchant across various
platforms, e.g. a combination of payments from their computer,
smartphones and smart TV.
Our recommendation to merchants is to try to provide a seamless payment
flow across various devices: for example by having a user account with
billing information linked to it. With carrier billing, this enables a 1-click
experience from any device, even if the user is making their first payment
on a device.
Source platform: web payments (6 months average - October 2014 to March 2015)
Country
Mobile
Desktop
Tablet
Brazil
61.04%
34.48%
4.48%
Mexico
88.15%
6.61%
5.24%
Colombia
58.66%
36.06%
5.27%
Argentina
55.85%
40.92%
3.23%
Peru
80.25%
18.48%
1.27%
Venezuela
24.67%
73.06%
2.27%
Chile
59.52%
36.51%
3.98%
Mobile Payments in Latin America
Mexico
Colombia
Venezuela
94% Spanish
97% Spanish
93% Spanish
5% English
3% English
6% English
1% other
1% other
Language & Localization
in Latin America
If the user does not understand English well enough to navigate their
phone, they will most likely also not be able to understand your service.
Keep in mind that the language used needs to be understandable even for
those users who don’t speak the language. Using simple terms such as
“Store” and “Buy” helps with this. It’s also a good idea to visualize the main
functions related to purchasing (e.g. a shopping cart icon for your store).
Peru
99% Spanish
1% other
Brazil
Brazilian Portuguese and Spanish localizations are a critical prerequisite
for entering the Latin American market. Data from the Fortumo payment
products confirms the fact that most Latin American countries have a
single-digit percentage of the population speaking English.
Unlike other emerging regions where local social networks are popular
(e.g. vKontakte for Central & Eastern Europe and QZone for China),
Facebook is the dominant network in Latin America, meaning that
localization in terms of social plugins is not a necessity.
97% Brazilian Portuguese
3% English
Chile
94% Spanish
5% English
1% other
Argentina
92% Spanish
7% English
1% other
Mobile Payments in Latin America
Map of South America with Countries by FreeVectorMaps.com
About Fortumo
Fortumo allows any merchant to set up payment processing for web and
mobile services, games or apps. Users with a mobile phone are then able to
make one-click payments using Fortumo without the need for a credit card:
payments are charged to their mobile operator bill instead. Fortumo supports
payments in 88 countries through 350 mobile operators. Founded in 2007,
Fortumo has offices in Estonia, US, India, China and Singapore and is
backed by Intel Capital and Greycroft Partners. Get started with mobile
payments at https://fortumo.com.
https://fortumo.com
[email protected]
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