IBM expects 1-2 large m-payment markets within 2 years

Thursday, August 4, 2011

IBM (NYSE: IBM) expects to see one or two mobile payment markets with at least 1mn clients in Latin America within the next 24 months, Alberto Jiménez, IBM's mobile payments leader, told BNamericas.

IBM identifies markets of this size as being "of scale." Throughout the world nearly 160 pilot programs have been launched, but there are only five that have scale and none are in Latin America. "Even so, we're optimistic; with [opportunities coming from] the two biggest operators in the region and the big Mexican and Brazilian banks," he said.

Some of the largest m-payment markets are found in Kenya with M-Pesa, two operators in the Philippines and one in Uganda. IBM provides the platform behind the largest ecosystem of those - M-Pesa, with 14mn active clients, who are exchanging nearly US$550mn a month. "And these aren't over smartphones, they're basic devices that don't have data plans," Jiménez noted.

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The executive cited a global payments study from McKinsey, which in 2009 estimated that 93% of all transactions in Brazil took place in cash, 98% in Mexico and 99% in Colombia. Just getting 10% of the cash exchanges could represent a significant amount of money handling for telcos and their bank partners.

To see the full interview with Jiménez, see this week's Telecommunications Perspectives, for subscribers only.