Regulatory adjustments needed to incentivize Chile mobile payments

Some regulatory adjustments are needed to facilitate the development of mobile payments in Chile, the country manager of mobile payment firm Kuapay's local unit, Rodrigo Solís, told BNamericas. The current regulations allow private players to develop several mobile payment services, but they could be perfected to incentivize the development of mobile payments in Chile, the executive said. If regulators were to implement a small change to current regulations to allow non-banking actors to develop prepaid accounts for cell phones, this would allow a range of actors to enter the market. Once the mobile payment market is more developed, then regulators could begin to implement additional regulations, but they must allow the initial development to take place, Solís added. Regulators in Chile are open to allowing the development of mobile payments, and the discussion is on the table, local mobile payment firm Ionix Chile's COO Cristián Feres added. Mobile payments have yet to really take off in Chile, and it is difficult to know how the industry will develop, according to Feres, who added that he is sure that mobile payments will develop in Chile. In Chile, the potential to develop mobile payments is stronger among early technology adopters looking for value added services, rather than as a tool to provide basic financial services to the unbanked population, Solís and Feres agreed. Chile has a high level of access to financial services, and the lower income segment is well covered by state bank Banco Estado, making it a bit less attractive than in some other markets, according to Solís. Almost everyone in Chile has a bank account, so the idea that someone who does not have access to banking services is going to transfer directly to mobile banking is unlikely, Feres added. However, this does not mean that mobile payments wouldn't also be an attractive tool for the unbanked population, he said. Meanwhile, Chile is in general a rapid adopter of new technologies, which could be the case for mobile payments if early adopters begin to use these types of services, according to Solís. Just as there are people who are early adopters, there are also companies, banks and retailers who are early adopters, and these actors could drive the growth of mobile payment services, he said, adding that if end users begin to adopt these services then other industry players will also begin to provide mobile payment solutions. Some companies will be innovators, and others will wait to see the results of early initiatives before deciding to enter into mobile payments, Feres said. There are still few concrete mobile payment projects in Chile, but clients are beginning to develop these services, and several operators are likely to be integrated into the market in the medium term, he added.