Mobile Payment Services in LATAM, 2023-2030

The Adoption of Digital Payments Is Creating Transformational Growth Towards Cashless Societies

Mobile payments are digital payments made using a mobile device, such as a smartphone, phablet, tablet, or personal digital assistant. These mobile payments are made through digital wallets and A2A platforms, financed by eMoney, credit, or debit cards.

The goal of this study is to find out the adoption of mobile payments in LATAM, focusing only on mobile payments of POS and eCommerce national markets, using mobile proximity, QR code, SMSs, and peer-to-peer (P2P) transfers through eWallets issued by banks and non-banking institutions. In the quantitative aspect of the study, to measure the industry size of 2024 and its 5-year forecast, the study is based on transaction value and volume, along with LATAM's forecast of the market's growth for the next 5 years.

Brazil leads in terms of LATAM mobile payment adoption, but how do other countries precisely fit into this dynamic landscape? While this study primarily takes a regional perspective, it also highlights the current status of key national markets: Argentina, Brazil, Chile, Colombia, and Mexico. To sum up, the study presents LATAM's key drivers and restraints, significant market trends, and growth opportunities, along with other essential insights into the mobile payment industry, offering a comprehensive overview.

The Impact of the Top 3 Strategic Imperatives on the Mobile Payments Industry of LATAM

Transformative Megatrends

Why

• COVID-19 boosted the digitalization era in LATAM. Consumer habits have changed, turning eCommerce into the most preferred channel to shop. Increased smartphone accessibility and affordable data plans offer LATAM consumers the flexibility to engage in online activities at any place and time, including mobile payments.

Frost Perspective

• Mobile payment vendors are investing billions of dollars in enhancing their payment product lines with incremental technology investment to cater to emerging use cases. Within this convergent landscape, as mobile payment methods keep gaining momentum, the next five-year period will include accelerated growth of high-quality payment platform demands by consumers.

Industry Convergence

Why

• Successful mobile payment deployments involve the seamless integration of cross-industry solutions, including digital and network infrastructure, cloud and edge services, sensor devices, and software development kits. As a result, new competitors, such as financial technology (FinTech) companies, have arrived.

Frost Perspective

• This is an industry composed of companies that use technology to make financial services more efficient. Therefore, adoption of mobile payment technologies is partly dependent on technology limitations and merchant acceptance. In this context, payment providers need to focus on improving digital infrastructures, merchant networks, and cross-border payment corridors to accelerate adoption.

Competitive Intensity

Why

• Having a massive customer base has become key for staying at the forefront of the mobile payments market. The region's national markets are consolidated, with 3 to 4 major service providers leading the growth trajectory because of their substantial investment capacity and extensive client bases.

Frost Perspective

• Every national market within LATAM is led by a few strong providers. However, Frost & Sullivan detects that the number of technology companies that offer payment solutions has increased exponentially. As a result, in the next 5 years, industry convergence and investment among ecosystem stakeholders will expand customer options and the merchant base.

Scope of Analysis

• This study presents an overview of the mobile payment services market in LATAM, showcasing its drivers and restraints, the most important market trends, and growth opportunities.
• Mobile payments are digital payments made using a mobile device, such as a smartphone, phablet, tablet, or personal digital assistant. These mobile payments can be made through digital wallets and Account-to-Account (A2A) platforms, which are financed by e-money, credit, or debit cards.
• This study excludes B2B transactions, focusing only on mobile payments of POS and eCommerce national markets.
• This is why the study's segmentation is geographic (regional, to be precise). It focuses on five countries: Argentina, Brazil, Chile, Colombia, and Mexico. The rest of LATAM will be included in the quantitative analysis to get to a round number for the whole LATAM region, but it is not going to be analyzed at a further level in the Growth Generator Section. The proportion of mobile transactions (in value and volume) for each country is considered an indicator of the potential for mobile payments.
• In the quantitative aspect of the study, to measure industry size in 2024 and its forecast for the next 5 years, the study is based on transaction value and volume, along with LATAM's forecasted market growth for the next 5 years. This market sizing analysis includes payments made at POS and online, using mobile proximity, QR code, SMS, and peer-to-peer (P2P) transfers through eWallets issued by banks and non-banking institutions.
• As this study covers the overall mobile payment services ecosystem, variables such as transaction volume, value, and revenue forecasts segmented by company size are too varied to provide a meaningful analysis and are therefore only discussed qualitatively.

Key Competitors

Regional Presence in LATAM

• Apple Pay
• Google Pay
• Mercado Pago
• Samsung Pay (Samsung Pay)
• Pay Pal
• BBVA Wallet

Argentina

• MODO
• Cuenta DNI
• Uala
• Naranja X

Brazil

• Pix
• NU Bank
• Pic Pay
• PagBank

Chile

• Mach Pay
• Fpay (Fallabella Pay)
• Tenpo
• OnePay
• Khipu
• BancoEstado App

Colombia

• Nequi
• DaviPlata
• PayU
• RappiPay
• ePayco

Mexico

• NU Bank Mexico
• Oxxo Pay
• Clip
• CoDi

Competitive Environment

• Number of Competitors
  • 30+
• Competitive Factors
  • Cost, performance, benefits, support, technology, reliability, security, strategic partnerships, brand image
• Key End-User Industry Verticals
  • Consumers in retail, gastronomy, and final consumer services
• Leading Competitors
  • Apple Pay, Google Pay, Mercado Pago, Pay Pal, Samsung Wallet, and BBVA Wallet
• Other Notable Competitors
  • MODO, Pix, Mach Pay, and Nu Bank
• Distribution Structure
  • The distribution structure relies on several participants, but in this study, the only participants that are going to be mentioned are consumer, digital wallet, and business.
• Notable Acquisitions and Mergers
  • Amazon's integration with digital wallet, PSE, in Colombia, provides the unbanked population the chance to access Amazon products and services. Pix and Mercado Pago's partnership enables Mercado Pago POS terminals in Argentina to accept payments through Pix for Brazilian tourists.

Growth Drivers

• High Internet and Smartphone Penetration: This leads to a large potential user base with the resources to use mobile payments.
• Booming eCommerce Market: Since the COVID-19 pandemic, digitalization has led to changes in consumer behavior, with a preference for eCommerce channels over traditional ones, and, even more importantly, a significant portion of eCommerce transactions are now conducted through eWallets.
• Development of Transaction Technologies: The introduction of NFC, QR, biometrics, and tokenization has transformed mobile and online payments.
• Government-Led Initiatives: Local governments are actively involved in promoting the adoption of mobile payment services by implementing their own payment systems.

Growth Restraints

• High Cost of Infrastructure Development: The high cost of core infrastructure and operation can hurt the adoption of open banking systems.
• Intense Competitiveness: Most markets have multiple players competing for dominance. Existing players are racing to increase their user base by providing incentives, improving user experience, and expanding use cases through partnerships.
• Traditional Alternative Payment Methods: Mobile payment platforms are competing against traditional payment methods, such as cash and physical credit and debit cards. Merchants in small cities and informal workers are still typically paid in cash.
• Security and Privacy Concerns: Data breaches and payment fraud are some of the security concerns that hinder digital payment adoption and market growth.