Latin America Mobile Growth: Current & Future Trends

Latin America (LATAM) represents a remarkably dynamic mobile marketplace, experiencing some of the most rapid expansion globally. In 2018, the region counted 326 million individuals accessing the internet via mobile devices, a number projected to surpass 422 million by 2025. A key driver of this substantial growth is mobile technology serving as the primary means of internet connectivity throughout Latin America, offering a convenient solution for individuals in remote, rural communities to connect to the digital world. The increasing popularity of social media and messaging applications in recent years has further fueled the need for enhanced and optimized mobile services.

With continued increases in mobile adoption across LATAM, we are seeing the emergence of groundbreaking applications designed to foster social advancement, empower financial independence, provide connections to international commerce, and contribute to overall societal progress. Although the level of development and specific regulations vary from country to country, shaping the mobile environment in each, distinct patterns are observable throughout the entire region.

These emerging patterns are shaped by both the specific circumstances of the Latin American mobile environment and wider global developments, offering valuable insights into the evolving expectations and behaviors of mobile users. Understanding and adapting to these trends will be crucial for new mobile applications and services seeking to achieve significant market impact.

The following outlines the present and anticipated trends driving mobile growth throughout Latin America:

Digital wallets

A significant portion – around 70% – of the population in Latin America lacks access to traditional banking services or has limited access, creating a substantial opportunity to expand financial inclusion. Digital wallets represent a growing solution, functioning through credit additions and eliminating the need for a conventional bank account or physical bank location for setup. Consequently, digital wallets address the skepticism many individuals in Latin America hold towards established banking systems.

The COVID-19 pandemic has undeniably accelerated the increasing popularity of mobile wallets throughout Latin America. Given the region’s reliance on cash transactions, anxieties surrounding the handling of banknotes have been substantiated by recent research indicating the virus can persist on currency for up to 28 days. This has prompted a large number of people and shoppers to seek out more secure alternatives to cash. In Mexico, digital wallets accounted for an estimated 27.7% of the e-commerce payments market for consumer purchases by 2021, and Argentina has also experienced considerable in-store digital wallet usage throughout the pandemic.

In Venezuela, AirTM’s digital wallet has facilitated the distribution of funds allocated to essential workers by interim President Guaidó. The company played a crucial role in getting the money to healthcare professionals after the Maduro government prevented the service from operating within the country. In addition to providing financial assistance, digital wallets in Venezuela and other nations experiencing high inflation allow residents to avoid carrying substantial sums of cash.

It is worth emphasizing that Latin American consumers were already beginning to adopt digital wallets before the onset of COVID-19. In 2019, they were the third most frequently used payment method on Brazilian e-commerce sites, representing approximately 14% of all transactions. Similarly, companies like PayPal, Mercado Pago, and Nequi had all introduced digital wallet services in Latin America prior to the pandemic. It is reasonable to conclude that digital wallets were steadily becoming a viable payment alternative, but COVID-19 has significantly accelerated and solidified widespread acceptance, establishing digital wallets as a long-term payment solution.

QR codes

Quick response codes, widely recognized as QR codes, are gaining prominence as they integrate with existing payment methods that most individuals already understand. These codes serve as a connection for those less familiar with technology, bridging the divide between the digital and physical realms and promoting a shift from traditional to digital procedures.

A 2019 study indicated that 13% of internet users in Latin America had utilized a QR code within the past month, in contrast to 8% in North America. Mercado Pago — a digital payment solution for both consumers and businesses throughout Latin America — processed three million transactions via QR codes in 2018. Simultaneously, in Argentina and Colombia, 40% of the population employs their mobile devices to scan QR codes in various ways. The Central Bank of Argentina has even created guidelines for QR code payments, establishing regulations concerning the arrangement of characters within the codes. This framework could serve as a model for other Latin American nations to adopt and implement comprehensive QR code strategies.

It’s important to note that QR codes are not limited to financial transactions. In 2018, a leading Brazilian dairy company incorporated QR codes onto its milk packaging, which, when scanned, revealed product details. The campaign generated over 12,000 codes per hour. More recently, Colombia launched CoronApp, where individuals input personal data and respond to health-related questions. Those cleared for public access receive a “mobility passport” as a QR code, enabling entry into public areas.

QR codes are now frequently seen in the restaurant and bar industry as these businesses reopen following the pandemic. To minimize the risk of contamination from menus and reduce staff interaction with customers, patrons can scan codes with their smartphones, view the menu, and sometimes even submit their orders electronically.

Given their diverse applications, QR codes offer a practical means for Latin American consumers to engage with their environment while simultaneously performing digital tasks – a crucial factor both during and after the pandemic. Looking ahead, Claudia Cabrera of the digital transformation firm intive, emphasizes the need for mobile applications to prioritize the interoperability of QR codes; that is, codes that aren’t tied to a specific provider and enable users to interact with a variety of mobile services.

On-demand delivery

Sales through home delivery have increased fourfold over the past five years. The widespread adoption of smartphones has created a consumer base that readily embraces online shopping, which in turn is driving the growth of on-demand delivery platforms.

Rappi, a Colombian company valued at over one billion dollars, is at the forefront of this trend, currently serving more than 10 million active monthly users across nine countries in the region. Initially focused on attracting younger, millennial customers, the company has adapted its user experience to appeal to a broader range of demographics as mobile technology becomes more accessible and user-friendly. Furthermore, Rappi distinguishes itself from competitors by offering services beyond food delivery; Rappi Favor facilitates the pickup of any type of item, Rappi Pay functions as a digital wallet for use with other services within the app, and Rappi Bets provides a platform for sports and casino wagering.

Other rapidly growing delivery applications include Cornershop, originating from Chile, which has broadened its reach to include Colombia, Mexico, Peru, and Brazil thanks to its ability to handle multiple currencies, languages, and time zones. Glovo has established a strong presence in Peru, accumulating two million app downloads since its launch in 2015. In 2019, iFood, a Brazilian service, processed 390,000 deliveries daily. Notably, online food ordering in Brazil experienced an 80% increase in 2018 and is projected to fully supersede conventional food delivery methods by the year 2024.

5G connectivity and interoperability

Even as the expansion of 4G networks continues throughout Latin America – forecasts suggest 67% regional coverage by 2025 – several nations are beginning to explore the possibilities of 5G technology. Given that 80% of the population resides in cities, 5G-supported urban environments stand to deliver considerably quicker data processing, greater bandwidth capacity, enhanced device connectivity, and potentially longer battery performance for mobile users.

Uruguay led the way in April of the previous year, becoming the first country to implement a 5G network through its state-owned telecommunications provider, ANTEL, in partnership with Nokia. In other developments, Movistar, a telecommunications firm, is conducting a 5G trial in Colombia aimed at assisting in the management of the COVID-19 pandemic. A camera utilizing this technology has been set up at the Secretary of Health building in Bogotá, enabling real-time temperature monitoring of over 400 staff members.

During the second quarter of 2020, Latin America recorded 3,685 5G subscriptions. The formal launch of 5G services is anticipated in Argentina, Brazil, Chile, Colombia, and Mexico, though a definitive timeline remains unconfirmed. In the interim, applications and digital services designed to plan for and optimize 5G networks will be well-positioned within these markets. Key areas for development in anticipation of widespread 5G adoption include features such as smooth interoperability with various devices, machine learning capabilities, cloud-based applications, software as a service models, and virtual reality streaming.

The growth of mobile technology in Latin America has revealed distinct patterns that not only reflect the current landscape but also indicate future directions. Although individual countries exhibit unique characteristics within the mobile sector, overarching themes suggest that LATAM is a market ready for widespread mobile innovation.

Mobile businesses that capitalize on existing advancements and incorporate trends like digital wallets, QR codes, on-demand delivery services, and 5G will be best prepared for significant success in LATAM – and potentially on a global scale.