By adaptive - August 8th, 2016
The countries of Latin America offer unique and compelling opportunities for mobile payments, especially given the proliferation of mobile devices in the region. But as Ruben Martinez reports from Bogota in this final installment, there are significant cultural and technological hurdles to clear before uptake becomes widespread.
Emerging economies in countries such as Brazil, Mexico and Colombia have populations keen to adopt new technologies and to rethink the way people participate in everyday economic activities.
Latin America is also a region with mobile penetration exceeding 100 percent. That means that there are more mobile phones (lines) than the area’s population. But it’s also a region where only 51 percent of its adult population has access to banking services, according to the World Bank.
The ultimate objective is to figuring out how to transform a top-up customer into a financial customer.
Banks in Latin America know they need to take a step forward to offer state-of-the-art services to consumers. The technology is already there, available to implement innovative products such as a complete digital banking service including mobile payments, however, other variables must be taken into consideration in order to succeed.
Miguel Valero Cañas, Digital Banking Director for Grupo Financiero Banorte, states: “We have been innovating in digital banking for many years, but there is still some mistrust in the digital channels from the market. So it is not just about the technology, it is also a matter of culture and adoption”.
Valero points to a key trend in Latin America: “People are already using their mobile phone to buy stuff, but not to pay for it.”
He explains that users are looking for products and services in their phones all the time, comparing prices and availability, getting quotes and calculating budgets. But users are still afraid of taking the last step to complete the process, which is actually paying for the product or the service. They still prefer to pay physically.
So the Banorte digital banking director says there must be a strong evangelization effort towards consumers. Valero says one key milestone for mobile payments to become a part of everyday life in the region is that “we need to reach a point where the customer can pay for the service or the product independently of the bank, retailer or channel he is using.”
He adds there must be a standardization and unification process between banks in terms of what technology to use, or what transactions to accept and how to treat them regarding mobile payments in physical businesses and stores.