Globally mobile payments and money transfers peer-to-peer (P2P) are soaring, but in Latin America (LAC) it is skyrocketing, driven by large populations on unbanked consumers. Projected CAGR is way north of 50%.
The LAC mobile money and payment services market is set to increase deployments for the unbanked population, which largely relies on cash and over-the-counter (OTC) transactions in place of electronic transactions. Currently, Brazil and Colombia have the majority of deployments for the unbanked, yet the partnerships between telcos and banks are dominant across Latin America.
A number of factors separate those that have witnessed high growth in the mobile money services market from those that have only registered modest growth: density of agent networks, partnerships with merchants and other providers in the ecosystem, and mainstream financial services. There are specific use cases in which telcos can still play a role in mobile money services and dominate the market such as social support, physical goods and services, online goods and services, and churn reduction.
Meanwhile, the Mexican mobile payment market is expected to record a CAGR of 68.8% between 2017 and 2021 to reach US$ 191 billion in transaction value terms by 2021, increasing from US$ 23 billion in 2017. In 2016, the market registered a growth rate of 68.3% over 2015, to reach US$ 13 billion.
Frost & Sullivan finds significant opportunity for growth in terms of the number of registered and active users across the region. By 2022, Latin America will have approximately 180.0 million registered mobile money and payment users with 91.8 million active users. In Brazil, Mexico, and Colombia, registered users are likely to reach 83.4 million, 39.6 million, and 17.8 million, respectively.