Mobile and Alternative Payments in Mexico - WRBL

Mobile and Alternative Payments in Mexico

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LONDON, June 19, 2014 /PRNewswire/ -- Reportbuyer.com has added a new market research report:

 

Mobile and Alternative Payments in Mexico

 

http://www.reportbuyer.com/telecoms/mobile_markets/mobile_payments/mobile_alternative_payments_mexico.html

 

The Mexican consumer financial services landscape is in the midst of great change, driven by the confluence of technological innovation, innovative forms of branch expansion, regulatory changes in consumer deposit accounts and bank cards, and a strong push to facilitate mobile banking and payments. Indeed, major banks and telecommunications companies, most notably Telcel, have launched mobile banking and payments platforms that we expect to gain significant traction in 2013. At stake is the transformation of the Mexican banking system-from remittances to redefining branch banking-which can address longstanding financial inclusion disparities by reaching tens of millions of consumers heretofore unable to participate in formal banking services.

 

Mobile and Alternative Payments in Mexico provides industry participants with the wealth of analysis and guidance they need to stay abreast of this quickly evolving market and help gauge its potential. Report coverage highlights include the following:

 

To place mobile payments in context, the report contains broader analysis of Mexican payments and consumer payment choices, including market sizing and issuer shares for credit cards and debit cards, and market sizing guidance on prepaid cards. We also analyze trends related to correspondent banking and branch expansion.

 

Assessment of mobile phone/smartphone penetration, consumer banking relationships, online banking, mobile banking and payment usage and interest, and mobile shopping and financial education interest, supported by results of our proprietary survey of Mexican adult consumers.

 

Insight into remittance senders' banking relationships, method of sending remittances, method of friends or family receiving remittances, and rationales for choosing, supported by proprietary interviews of Mexican immigrant remittance senders residing in the U.S.

 

Insight related to Mexican residents' sending and receiving international and domestic remittances, including sending method and amounts sent, supported by results of our proprietary survey of Mexican adult consumers.

 

We also analyze Mexican mobile banking and payment products and strategies being initiated by major banking and nonbanking players, including Banamex, Banorte, Santader, BBVA Bancomer, Telecomm-Telegraph, MasterCard, Visa, Wells Fargo, Grupo Elektra, and PayPal. To complement the report's emphasis on mobile banking and payments, we include analysis of leading mobile phone operators, including Telcel, Nextel, Iusacell and Telefónica Móviles México.

 

Executive Summary

Report Scope

Report Summary

Market opportunity

Mexican payment trends

Electronic payments make strides, but cash remains King

A strong, entrenched cash culture

Even among banked consumers

Demand deposits more popular

Level I accounts make a splash

Growing branches, ATMs and correspondent banks: BBVA Bancomer on top

Check transactions decline, while credit cards and debit cards gain

Prepaid cards: new to market, but making inroads

Proprietary survey results underscore power of cash, potential of banking relationships

Mexican internet & mobile phone usage trends

Broad-based telecommunications growth

Internet usage increasing, but still capped at 36% of population

So why not go mobile? Everyone's got one

Smartphone penetration approaching 20%

Internet-connected adults have smartphones; non-connected don't

Among internet-connected, income and region shape mobile & smartphone penetration

Telcel reaps 70% subscription share

Mexican mobile banking & payment trends

Lots of mobile phones, little financial inclusion

Government data reveals seeds of online banking usage

Proprietary survey analysis: mobile banking/payments have already taken root

Account engagement leads payments

P2P usage could be 3.7 million

But most consumers interested in SMS text payments

Other methods also of interest-but technology will need to catch up

Interest in mobile shopping and mobile phone public transportation payment

Smartphones are strong usage differentiator, but interest among non-smartphone users

Mexican mobile remittance trends

U.S.to-Mexico remittances top $23 billion but mobile is not a factor

Costs declining; internet method is cheapest

U.S. immigrant remitter interviews: banked and connected; but banks and internet not used

Internet-connected Mexican adults engaging in international remittance/P2P

Domestic migrant remittance market undervalued and underserved

Domestic remittance/P2P a different demographic animal

Key market participant: Telecomm-Telegraph

Key market participant: Xoom

Key market participant: MoneyGram International, Inc.

Key market participant: Western Union

Mobile & alternative payments strategies: financial institutions

American Express

MasterCard

Visa

Banamex

Banorte

BBVA Bancomer

Santander

Mobile & alternative payments strategies: other institutions

América Móvil

Telefónica Móviles México

Grupo Elektra

PayPal

MercadoPago

 

Chapter 1: Overview

Financial system

Regulation of the Mexican financial system

Mexican payments infrastructure

ATM and POS networks

Financial institutions participating in consumer banking and payments

Commercial banks

Development banks

Correspondent banks

SOFOME

SOFOL

Telecommunications regulation

Increasing mobile telecommunications competition

Telecommunications reform bill

 

Chapter 2: Market Opportunity

Future is bright for Mexican mobile payments

Closing the financial services gap by connecting to 57 million more people

Table 2-1: Financial Institution & Mobile and Electronic Payment Opportunity Analysis: 2012

Challenge: the rural and impoverished

Table 2-2: Computer, Landline Telephone, Cell Phone and Internet Penetration, by Size of Locality: 2010

Poverty is a part of the equation

Graph 2-1: Poverty in Mexico, 2012

Table 2-3: Mexico Urban and Rural Poverty headcount Ratio: 2011

Per capita growth ahead

Table 2-4: Historical and Projected GDP and Population Growth in Mexico: 2006-2015

 

Chapter 3: Mexican Payment Trends

Summary analysis

Electronic payments make strides, but cash remains King

A strong, entrenched cash culture

Even among banked consumers

Demand deposits more popular

Level I accounts make a splash

Growing branches, ATMs and correspondent banks: BBVA Bancomer on top

Check transactions decline, while credit cards and debit cards gain

Prepaid cards: new to market, but making inroads

Proprietary survey results underscore power of cash, potential of banking relationships

Payments trends

Mexico credit card & debit card volume share of GPD is one-fifth that of U.S.

Graph 3-1: U.S. And Mexico Credit Card & Debit Card Volume as Percentage of Country GDP: 2008-2012

U.S. and Mexico credit card and debit card volume share gains over time

Table 3-1: U.S. And Mexico Credit Card & Debit Card Volume as Percentage of Country GDP: 2008-2012

Demand deposit accounts

Transaction accounts, savings accounts and term deposit accounts

Demand deposit ratio improves

Basic accounts

Basic credit cards

New account structure plays a role

Traditional checking accounts dominate account and balance share

Table 3-2: Mexican Demand Deposit Accounts, Account Balance and Share, by Account Type: 2012

Mobile account application

BBVA Bancomer draws most Level I accounts and balances

Table 3-3: Level I Demand Deposit Accounts, Account Balance and Share, by Bank: 2012

Branch and ATM network analysis

Table 3-4: Number of Mexico Bank Branches and ATMs: 2008-2012

But banks reaching more and more via expanding ATM network

Banking branch and ATM leaders

Table 3-5: Number and Share of Mexico Banking Institution Branches and ATMs: 2012

Correspondent banking takes off

Checks

Transactions decline; volume flat

Table 3-6: Mexico Check Market Size: Cards, Transactions, Dollar Volume: 2008-2012

Credit cards

Credit card growth rebound

Table 3-7: Mexico Credit Card Market Size: Cards, Transactions, Dollar Volume: 2008-2012

Credit card market share

BBVA Bancomer, Banamex and Banorte card share grows

Table 3-8: 2012 Credit Card Market Share, by Commercial Bank Issuer: Number of Cards,

Balances & Volume

Casting a wider net

BBVA Bancomer, Banamex and Santander dominate

Table 3-9: 2012 Credit Card Market Share, by Commercial Bank/SOFOMER: Volume & Number of Cards

Spurring uptake with basic credit cards

Debit cards

Consistent, healthy card and transaction growth

Table 3-10: Mexico Debit Card Market Size: Cards, Transactions, Dollar Volume: 2008-2012

Table 3-11: 2012 Debit Card Market Share, by Commercial Bank Issuer: Number of Cards,

Balances & Volume

Prepaid cards

Historical growth

Future growth

Growth drivers

Bridging prepaid and mobile

Other players

Other payment mechanisms

Credit transfers

Electronic & internet banking transfers

Internet banking transfers

Survey analysis: consumer payments & banking relationships

Gender disparities noted

Table 3-12: 2013 Mexican Consumer Bank Account, Loan & Payment Card Penetration Rates,by Gender: 2013

Card usage trends upward with age

Table 3-13: 2013 Mexican Consumer Bank Account, Loan & Payment Card Penetration Rates,by Age: 2013

Regional disparities

Table 3-14: 2013 Mexican Consumer Bank Account, Loan & Payment Card Penetration Rates,by Region: 2013

By household income, credit card usage gap most pronounced

Table 3-15: 2013 Mexican Consumer Bank Account, Loan & Payment Card Penetration Rates,by HH Income: 2013

Cash, cash, cash! And then there's everything else

Cash a majority choice in six of eight spending categories

Debit card and credit card uptake for household goods and appliances

Prepaid encroaching on public transportation and mobile phone bills

Table 3-16: Cash, Credit Card, Debit Card, Prepaid Card, Check & Money Order Usage,by Consumer Expenditure Category: 2013

Cash loses favor as income increases

Table 3-17: Payment Instrument Usage for Groceries, Gas & Restaurant Meals, by HH Income: 2013

Table 3-18: Payment Instrument Usage for HH Goods and Appliances, by HH Income: 2013

Table 3-19: Payment Instrument Usage for Mobile Phone Bills & HH Gas/Electric Bills, by HH Income: 2013

Regional disparities

Table 3-20: Payment Instrument Usage for Groceries, Gas & Restaurant Meals, by Region: 2013

Table 3-21: Payment Instrument Usage for HH Goods and Appliances, by HH Income: 2013

Table 3-22: Payment Instrument Usage for Mobile Phone Bills & HH Gas/Electric Bills, by HH Income: 2013

 

Chapter 4: Mexican Internet & Mobile Phone Usage Trends

Summary analysis

Broad-based telecommunications growth

Internet usage increasing, but still capped at 36% of population

So why not go mobile? Everyone's got one

Smartphone penetration approaching 20%

Internet-connected adults have smartphones; non-connected don't

Among internet-connected, income and region shape mobile & smartphone penetration

Telcel reaps 70% subscription share

Internet and mobile phone use trends

Telecommunications growth strongly outstrips GDP growth

Internet trends

40 million now use Internet-but penetration only 36%

Graph 4-1: Mexico Internet User Population and Population Share: 2003-2012

Lagging U.S. and Canada; in the middle of the Central and South American pack

Graph 4-2: Internet Users per 100 People in North America, Central America & South America,by Country: 2003-2012

Generational differences

Youth is driving usage penetration

Graph 4-3: Internet usage penetration, by age: 2012

Mobile phone trends

100 million subscriptions and counting

Graph 4-4: Mexico Internet Usage and Mobile Phone Subscription Penetration Rates: 2003-2012

Smartphone penetration low but should spike by 2015

Graph 4-5: Mexico Internet Usage, Smartphone Usage and Mobile Phone Subscription

Penetration Rate: 2012

Cell phone operator market share

Graph 4-6: Mobile Phone Subscription Share, by Operator: Q1 2013

Proprietary survey results

Smartphone usage chasm differentiates internet-connected and non-connected

Mobile phone usage and smartphone usage share

Among internet users, smartphone share above 80%

Table 4-1: Mexican Mobile Phone Usage & Smartphone Usage Share: 2013

Internet, mobile & smartphone usage penetration: demographic analysis

Table 4-2: Mexican Internet, Mobile Phone & Smartphone Usage Penetration, by Age: 2013

Mobile & smartphone penetration relatively high even among lowest income groups

Table 4-3: Mexican Internet, Mobile Phone & Smartphone Usage Penetration, by HH Income: 2013

Penetration rates high in urban center

Table 4-4: Mexican Internet, Mobile Phone & Smartphone Usage Penetration, by Region: 2013

 

Chapter 5: Mexican Mobile Banking & Payment Trends

Summary analysis

Lots of mobile phones, little financial inclusion

Government data reveals seeds of online banking usage

Proprietary survey analysis: mobile banking/payments have already taken root

Account engagement leads payments

P2P usage could be 3.7 million

But most consumers interested in SMS text payments

Other methods also of interest-but technology will need to catch up

Interest in mobile shopping and mobile phone public transportation payment

Smartphones are strong usage differentiator, but interest among non-smartphone users

Online bankers

Table 5-1: Internet Bank Transfer Users: 2008-2012

Online banking uptake among internet users

Online banking only a niche

Graph 5-1: Purpose of Internet Use, 2012

Online banking crosses the million mark

Graph 5-2: Population and Percentage of Online Bankers & Online Purchasers, 2012

1.7 million online payers, but less than 1 million make financial service payments

Graph 5-3: Types of Online Payments Made, 2012

Proprietary survey analysis

Mobile financial services current use & future interest

Current use: mobile payment, shopping & purchasing tools

Strong traction: current use of mobile payments and purchases

Graph 5-4: Percentage of Mobile Phone Users Who Performed Mobile Financial Services Tasks in Last 12 Months: 2013

Interest in next 12 months: mobile payment, shopping & purchasing tools

Interest in paying via SMS texting highly likely

But app- browser- and contactless payment interest also suggests promise

Graph 5-5: Mobile Phone User Interest in Performing Mobile Financial Services & Shopping Tasks in Next 12 Months: 2013

Current use & future interest: Smartphone and non-smartphone users

Mobile payment/shopping/purchasing use skews heavily to smartphone users

Table 5-2: Percentage of Mobile Phone Users Who Performed Mobile Financial Services Tasks in Last 12 Months: 2013

But sizeable interest exists among non-smartphone users

Table 5-3: Mobile Phone User Interest in Performing Mobile Financial Services & Shopping Tasks in Next 12 Months: 2013

 

Chapter 6: Mexican Mobile Remittance Trends

Summary analysis

U.S.to-Mexico remittances top $23 billion but mobile is not a factor

Costs declining; internet method is cheapest

U.S. immigrant remitter interviews: banked and connected; but banks and internet not used

Internet-connected Mexican adults engaging in international remittance/P2P

Domestic migrant remittance market undervalued and underserved

Domestic remittance/P2P a different demographic animal

Key market participant: Telecomm-Telegraph

Key market participant: Xoom

Key market participant: MoneyGram International, Inc.

Key market participant: Western Union

Mexican remittances market

Table 6-1: International Remittances Received from U.S. & Received by Mexico, by Country: 2012

Inflows over time: robust growth, following by rocky trending

Graph 6-1: Remittances Received by Mexico: 2003-2012

Remittance payment methods

Cash option

Credit card and debit card

Online and mobile

Globally, mobile remittance promise remains unfulfilled

Regulatory and operational challenges

Remittance costs declining

Costs of remittances at banks decline-now cheaper than a money transfer operator

Graph 6-2: Cost to Send $200 from U.S. to Mexico: Fees, Exchange Rate Margin & Total Cost,Q1 2010 to Q1 2013

Online methods generally cheapest; banks are in the middle

Table 6-2: Cost to Send $200 from U.S. to Mexico, by Remittance Service: Q1 2013

A window into cross-border remittance partnerships

Table 6-3: Cost to Send $300 from U.S. to Mexico, by Remittance Service,With Funds Collection Points: 2013

Proprietary survey analysis: U.S. immigrants remitting to Mexico

Participant analysis

Low HH incomes do not stop remitters from sending significant amounts

Connected to the internet and mobile

Majority are banked

Table 6-4: U.S. Mexican Immigrant Remitters: Basic Demographics, Banking Relationships& Amount Sent: 2013

But internet-driven methods to send money are not used

And yet few use banks to send money

Western Union: a popular choice, but complaints about cost

Table 6-5: U.S. Mexican Immigrant Remitter's Primary Method of Sending Money to Mexico: 2013

Table 6-6: U.S. Mexican Immigrant Remitters: Primary Method of Receipt in Mexico: 2013

Cross tabbing notes

Qualitative participant assessments

Maria's priorities: security for recipient; convenience and cost for sender and recipient

Miguel's priorities: building a home in Mexico and gauging the exchange rate

Teresa: convenience and cost drive the decision

Carlos: no banking relationship, paid in cash, and an Intermex user

Proprietary survey analysis: Mexican international remittances/P2P

Remittance/P2P summary results

Table 6-7: Mexican Adult Internet Users Who Send/Receive International P2P Payments& Amounts Sent: 2013

Usage and amounts highest among 18-24s

Table 6-8: Mexican Adult Internet Users Who Send/Receive International P2P Payments & Amounts Sent,by Age: 2013

Amount sent/received highest among higher-income respondents

Table 6-9: Mexican Adult Internet Users Who Send/Receive International P2P Payments & Amounts Sent,by HH Income: 2013

Banks most likely receiving method; internet most likely sending method

Table 6-10: Primary Remittance/P2P Sending/Receiving Method: 2013

Domestic remittances

Untapped potential

Market opportunity larger than current industry receipts

Domestic remittance costs

Migrant domestic remittance demographics

Sending method

Banking products

Mobile remittances

Proprietary survey analysis: Mexican domestic remittances/P2P

P2P penetration near 40%

Table 6-11: Mexican Adult Internet Users Who Send/Receive Domestic P2P Payments & Amounts Sent: 2013

Table 6-12: Mexican Adult Internet Users Who Send/Receive Domestic P2P Payments & Amounts Sent, by Age: 2013

HH income analysis

Table 6-13: Mexican Adult Internet Users Who Send/Receive Domestic P2P Payments & Amounts Sent, by HH Income: 2013

Table 6-14: Method Used to Send & Receive Domestic Remittance/P2P Payments: 2013

Market participant analysis

Expanding points of access

Successful test case leads to wider rollout

Results demonstrate promise

Xoom

An enticing value proposition

Powerful, extensive partnerships in U.S. and Mexico

Mobile leadership

Online strength also a drawback

Revenue and costs

Growth analysis

Table 6-15: Xoom Sending Volume, Customer, Revenue & Income Metrics: 2008-2013

MoneyGram International, Inc.

Western Union

Services

Electronic channel growth and scope

Loyalty program and prepaid

Mexico volume decline

 

Chapter 7: Mobile & Alternative Payments Strategies: Financial Institutions

Card Associations

American Express

Minor Mexican presence

Payment diversification

Mexican differentiated products

MasterCard

PayPass

Security

PayPass global network growing fast, but remains small

PayPass Wallet Services . . .

. . . becomes MasterPass

Wanda

Mobile remittance platform launch in Mexico

Mexico prepaid launch

Visa

V.me

Priority 1: driving consumer adoption

Rollout with major U.S. banking and retail partners

PayWave

Latin America prepaid card push

Fundamo

Vodafone agreement

Mexican mobile banking

Banks

Banamex

iAcepta card reader and mobile application

Transfer payment platform expected to rocket to 1 million accounts

Off to a good start

Table 7-1: Transfer Contracts: 2012

Telcel phone number becomes a bank account

Grupo Financiero Banorte

Table 7-2: Grupo Financiero Banorte Branch, ATM, POS, Internet & Mobile Banking Metrics: 2010-2012

Credit card growth

Correspondent banking growth

Online banking

Mobile banking and payments

MiFon: a mobile payment application for underserved communities

Different from Banamex service

A rural success?

Cost

PagoMóvil: a mobile payment application for existing banking customers

BBVA Bancomer

Mobile Money

How it works

Additional features

Requirements and transaction limits

Santander

Supermóvil: a token-based mobile banking and payment solution

 

Chapter 8: Mobile & Alternative Payments Strategies: Other Institutions

América Móvil

Landline telephone and broadband

Wireless operations

Prepaid and postpaid

Rates

Data services growth

Networks and technology

Telefónica Móviles México

Zero Prepayment campaign

M2M

Grupo Iusacell

Nextel Mexico

3G launch

Grupo Salinas

Grupo Elektra

Table 8-1: Primary Remittance/P2P Sending/Receiving Method: 2013

Alternative Payments & Emerging Wallet Payment Strategies

Google Wallet

Study it closely

Wallet 1.0: lots of fanfare; little success

Wallet 1.5: putting it in the cloud

Calling all cards

Save to Wallet feature

Online/offline integration: Enter the virtual prepaid card

Online purchases: ubiquity, courtesy of MasterCard

In-store purchase limited by NFC

Security enhancement

Wallet 2.0: Leapfrogging NFC with a physical card

PayPal

122 million accounts

More than 1.5 million Mexican accounts

Online and mobile capability

Mobile payment apps

In-store payment launched in U.S.

PayPal Here: POS payment solution

QR codes for Mexico

Volaris alliance

MercadoPago

eBay connection

Functions and services

Credit card reliance

Volume and revenue

Table 8-2: MercadoLibre Revenue and Usage Metrics: 2008-2012

Appendix

Consumer survey methodology

Packaged Facts Mexican Survey Demographics

Survey analysis by region

Smartphone

Market size

Report table interpretation

Abbreviations

Currency conversion

Terms and definitions

 

 

 

Read the full report:

Mobile and Alternative Payments in Mexico

http://www.reportbuyer.com/telecoms/mobile_markets/mobile_payments/mobile_alternative_payments_mexico.html

For more information:

Sarah Smith

Research Advisor at Reportbuyer.com

Email: query@reportbuyer.com

Tel: +44 208 816 85 48

Website: www.reportbuyer.com

 

©2012 PR Newswire. All Rights Reserved.

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