This market report takes a look at the carrier billing landscape in Latin America (Brazil, Mexico, Colombia, Ecuador, Uruguay) and Iberia (Spain, Portugal).
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We have combined these regions into one report due to close historical, cultural and linguistic ties. For digital content merchants, this means the regions have similar interests in terms of content people are willing to pay for, as well as localization requirements. On the payments ecosystem side however, Latin America and Iberia are quite different.
In Latin America, traditional payment methods have low access: on average, 53% of people have a bank account and 20% have a credit card. Carrier billing is popular here due to its bigger reach (any mobile user can make payments) and simpler checkout flows. According to SuperData, carrier billing has a 16% to 28% market share (depending on the country) for digital gaming in Latin America.
Compared to other regions globally, Latin America slightly lagging with both the technical solutions that mobile operators provide, as well as the commercial terms they provide. Additional complexity is created by the need for a local entity in a number of countries, as well as high taxation rates. This means carrier billing is primarily suitable for selling virtual content, such as games.
However, things are starting to change in Latin America as well, driven by leading operators such as Telefónica, who have seen excellent results from launching direct carrier billing for their primarily prepaid subscriber base.
In Portugal and Spain, the payments ecosystem is different. People have significantly better access to bank-based payments: bank account ownership is above 90% and credit card ownership is around 40%.
However, carrier billing is still popular primarily due to its user-friendly checkout flows and privacy. According to SuperData, this has resulted in carrier billing being used for 21% of all digital gaming payments in these countries, being second only to credit cards.
Recent changes in legislation (GDPR, PSD2 and related Strong Customer Authentication (SCA) requirements) also support the growth of carrier billing in Spain and Portugal, as substantially less consumer data is collected, while carrier billing is exempt from PSD2 and SCA regulations.
Data presented in the market report has been taken from public sources of information and aggregated data from payments processed by merchants using Fortumo’s Web SDK product.
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