Enterprise Retail / Mobile Payments / Cashless

No Plata. No Problema.

Verifone

Editorial Team

By Verifone

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Executive Summary

No Plata. No Problema.

How major Latin American markets are embracing cashless payments.

In the global landscape of payment solutions, Latin America is an interesting case study. While many of its countries are still struggling through recession—and the lowered consumer confidence that comes with it—the payments industries in major markets like Brazil and Mexico are booming.

Within the last decade, the growth of card-based transactions over cash in Latin America has reshaped the relationship between consumer and merchant. While the unbanked population of Latin America still hovers around 70%, according to an Americas Market Intelligence report, there is an emerging trend of cashless transactions amid the major market countries. The preference for plastic over cash isn’t the only thing powering that trend—innovative payment technology is also sweeping the region.

While Latin American banks struggle to acquire new customers, mobile network operators (MNOs) in the region are having no such problem. According to the same Americas Market Intelligence report, smartphone penetration in Latin America has risen from 20% in 2013 to a projected 44% in 2017. With almost half of the population using smart devices, the opportunities for mobile-based payment options in Latin America are becoming greater.

There is no shortage of phones in these emerging markets.

Kevin McNish Head of Product, South America, LAC at Verifone

“There is no shortage of phones in these emerging markets,” says Kevin McNish, Head of Product, South Americas, LAC at Verifone. “In these countries, MNOs practically play the role of banks.” Both merchants and consumers alike in Latin America are taking advantage of the financial tools at their disposable—now on their smart devices.

The backlash to “cash only” in Latin America is a response to combat theft on both ends of the commerce spectrum—consumers don’t want to carry cash on them, nor do merchants want registers filled with bills.

On top of that, governments in Latin America also promote electronic and digitized payments, in order to better track revenue and reduce the risk of tax evasion and money laundering.

With card transactions becoming more prominent, as well as innovations in mobile payment technology, merchants in Latin America are seeking solutions to address a changing commerce ecosystem. They need solutions that meet the needs of their customers, but
that also adapt to the challenges of their environment.

Merchants in Latin American areas with poor infrastructure are susceptible to outages, whether it be a phone line, the internet, or all electrical power going down. As such, a device that is outage-proof and can maintain steady uptime is essential to preventing the loss of any transactions.

Verifone will soon be launching the V240m, a fully functional portable payment device, to provide merchants in areas like these with the flexible connectivity options they need to accept worry-free payments.

In markets like Brazil and Mexico, as well as Argentina, Chile, and Colombia, the V240m is an economic answer to the challenges merchants face, while also offering innovative functions and features, such as touchscreen, access to the Verifone App Marketplace, and comprehensive payment acceptance, including contactless.

While economic challenges persist, Latin America remains a vital region in the greater payments industry landscape as it continues to embrace change. Technology like NFC and mobile wallets will continue to usher in more change, making it increasingly important for merchants, acquirers, and issuers in the region toembrace a new wave of payments.