Wide range of mobile financial services in Latin America, but low user uptake - Ericsson

There are currently a wide range of mobile financial services available in Latin America, including m-payments, remittances and banking operations, although the market is highly fragmented and user uptake is low, according to a new report by telecoms infrastructure provider Ericsson (Nasdaq: ERIC). However, the rapid increase in smartphone penetration in the region has lead to increasing consumer interest in m-commerce solutions, the report added. M-commerce in the region has reached 31% of internet users in Chile and Mexico, 30% in Brazil, 28% in Colombia and 21% in Argentina. However, m-banking penetration is markedly lower, at 20% of internet users in Chile, Brazil and Colombia, 18% in Mexico and 12% in Argentina, Ericsson said. M-wallet solutions meanwhile are used by 13% of internet users in Brazil, 12% in Mexico, 11% in Chile, 10% in Colombia and 7% in Argentina. The key driver of m-commerce solutions in Latin America is convenience for users, however this will vary depending on their level of income and financial inclusion, according to the report. Non-banked individuals would benefit from m-commerce solutions in order to avoid spending large amounts of time queuing to pay bills, while banked individuals would benefit from the increased flexibility provided by m-commerce when it comes to making payments, purchases and other monetary transfers. Currently around 61% of the Latin American population does not have access to banking services, Ericsson added, citing World Bank figures. However, conditions for the growth of m-banking services are favorable in the region, with 66% of those not currently using m-banking saying that they would be interested in using such a solution, with that figure rising to 74% for m-commerce, and falling to 42% for m-wallet solutions. Meanwhile, smartphone penetration is set to reach 60% in 2017, and the combination of low financial inclusion and high mobile penetration opens opportunities for m-commerce growth in Latin America. However, the general lack of confidence in institutions and telecoms networks is a factor which is delaying the adoption of m-commerce in the region.