Understanding the digital ecosystem in Latin America
A region of opportunity
According to a report by GSMA, it is expected that by 2025, 75% of Latin America’s population will subscribe to mobile services, closing the gap with the average for developed markets, which stands at 87%. 1 The digital economy in Latin America is a story in two parts. On the one hand, there has been a surge in the number of smartphone users and in mobile broadband penetration, which provide the basic foundation of any digital economy. Yet, on the other, there are several challenges stemming from the paucity of quality digital infrastructure, and weak or inadequate regulatory frameworks. Governments across the region acknowledge this potential and are working towards fostering environments more conducive to manifesting this growth.
Over the last two decades, a platform approach, especially in the payments ecosystem, has driven the growth of the digital economy. Processing over a billion dollars a day and generating direct revenues of over $2.4bn annually, mobile money has transformed the payment landscape in many emerging markets, including those in Latin America. With over 34 deployments and 21.5m registered accounts in 2017 alone, 2 mobile money in Latin America has been instrumental in the growth of the digital economy.
To further accelerate this progress, the entry of new players on both the demand and the supply side of the payments-as-a-platform approach will be essential. The network effects realised with more inclusive access, coupled with the proliferation of new technologies such as 5G and Artificial Intelligence, will enable people across Latin America to truly be able to participate actively in the shaping of a better tomorrow.