Page 61 - Pay Magazine s2014

Brazil
Beckons
There’s plenty to like about the prospects to electronify payments in the world’s seventh-largest economy.
By Bill Grabarek, Senior Editor
What’s not to like about
a country of more than 203 million people, well-organized banks, a good infrastructure for payments acceptance and a large unbanked/ underbanked population equipped with mobile phones?
For several years Brazil was identified as a go-to market for companies looking for growth opportunities in prepaid, especially mobile financial services with pre- paid at their core (“mobile money”). But, South America’s behemoth has faced economic, social and political issues, including a highly conten- tious 2014 presidential election, and, in March, the Brazilian real fell to a 12-year low—3.31 reais to the U.S. dollar. (The exchange rate has been slightly improving since.)
Still, potential is ripe for companies going beyond the traditional meal voucher market (see sidebar on page 62)—dominated by large incumbents—if they’re willing to invest, find the right local partners and convince consumers to move away from cash. MasterCard- commissioned research forecasts
the Brazilian prepaid market op- portunity at $65 billion by 2017 (see below). What’s more, the number of new mobile money services in Latin America is grow- ing 53 percent yearly, according to consultancy NearShore Ameri- cas. And, a 2013 e-money law
BRazil By the NUmBeRS
provides a regulatory framework for e-payments that many believe will foster competition and expand use of financial services.
Expanding Electronic Payments
Despite challenges, electronic pay- ment growth has been strong in
volume 8 • spring 2015
US$65 billion estimated prepaid card market opportunity by
2017 in Brazil. The prepaid card market across Latin America represents a US$133 billion opportunity by 2017.
55 million unbanked adults are transacting R$665 billion (US$205.7 billion) in cash per year.
27% of payments are electronic.
51% of Brazil’s population is connected to the Internet,
of which 97% are highly active users.
Sales of tablets and smartphones increased 119% between 2012 and 2013. Approximately 10.7 million mobile devices were sold in 2014.
Smartphones have become the primary means of accessing the Internet and account for 78% of all traffic, and could reach 85% this year.
SOURCES: Digital Evolution Index, GfK, Instituto Data Popular, Central Bank of Brazil, Boston Consulting Group, Brazilian Association of Credit Card Companies and Services. Data provided by MasterCard Brazil.
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