New forecasts from ABI Research indicate that in 2015 about 244 million people worldwide will carry out financial transactions using their mobile phones. This growth in the financial phone sector is not specific to North America or Europe, and large investment is anticipated in regions like Latin America.
Latin American infrastructure is a drawback; only about 33% of the population has access to formal financial services. But 80% have access to mobile phones, which presents a significant opportunity for extending financial services to millions of low-income customers in the region.
To support this, last month, IFC, a member of the World Bank Group, invested $3 million for Panama’s YellowPepper plus $2 million to help mobilization for the mobile financial solutions company, in an effort to expand mobile banking and access to financial services in Latin America. YellowPepper has now received $15 million from IFC, which stands as the only equity investment for a mobile banking firm.
‘Our goal is to bring the banking system to the masses via the mobile phone,’ comments Serge Elkiner, president, YellowPepper. “Because of the enormity of the task, we sought out an investor whose reputation and approach complement our strategy. IFC fits this profile perfectly. It is also one of the largest investors in electronic payments and mobile banking in the world, contributing invaluable insight and experience to innovations happening worldwide.’
Motorola recently conducted a survey where 51% of more than 4,530 consumers from the US, Canada, Spain, Mexico, Argentina and Brazil used their mobile device for shopping. Opinion is clearly divided however. Recent research suggests that there is high demand for mobile banking services among corporate clients, though security concerns may cause adoption to be slow.
In spite of this, major retailers and financial institutions such as Best Buy, Amazon, HBSC , Wells Fargo and Bank of America have joined the mobile revolution. Additionally, the ability to potentially charge fees for such services, something banks have shied away from on the consumer side, is attractive, according to analysts.