Android Wallets Beat Apple to Latin America

Apple Pay's international expansion has been slow enough that other mobile wallet providers are working to get out in front in markets such as Latin America.

In many cases, vendors are using the rival Android platform, which enables any developer to create a contactless mobile wallet through the use of host card emulation technology. HCE allows contactless payments without requiring access to the phone's secure element.

Though Google's tech is an enabler, Apple is still the driver of this trend.

"You have a lot of external forces driving change. For example, you have Apple Pay which is a good thing for expansion and market awareness," said John Ekers, Global CIO at American Banknote Corporation (ABnote), which is teaming with MeaWallet to offer a mobile payment system in Latin America.

ABnote, which provides payment and identity technology, uses MeaWallet's cloud-based mobile payment platform to offer an open loop mobile wallet. MeaWallet's tech is integrated with ABnote's EMV platform, and MeaWallet has given ABnote exclusive distribution rights for Mexico, Central America and South America.

"We'll be agnostic to all of the wallet solutions that are out there, with things like tokenization and HCE," Ekers said. Consumers can also store loyalty accounts, coupons and other services on the mobile wallet.

ABnote first partnered with MeaWallet to build a mobile wallet in the summer of 2015. ABnote in the fall released a software development kit that is similar in function to Apple's Passbook—allowing payment cards, bank account numbers, ID cards, tickets and gift cards—but for Android devices. "A lot the guys at MeaWallet are ex-IBM guys, they have the mentality that you go into a large retailer or a large issuer and tell them it's not a fly by night offer, it's part of a broader roadmap and strategy," Ekers said.

Since its debut in the U.S. in the fall of 2014, Apple Pay's expansion has been gradual. The service has since launched in the U.K., Australia and Canada, with availability in Spain and parts of Asia expected shortly. Apple also plans to launch in Latin America, according to the Cult of Mac, a website that covers Apple news.

The mobile payments market in Latin America is small, but there are factors that should encourage rapid growth. The rate of smartphone penetration is expanding fast. In particular, Brazil has a young, tech-savvy population and has already attracted digital payments investments, including virtual currency technology enabler Ripple Labs. The rest of Latin America is considered to be following Brazil's lead. In Mexico, Verifone and First Data have both made moves to build merchant technology business.

"Brazil is definitely the most exciting market to watch as it is large and innovative. Most cards are issued with an EMV chip," said Phil Philliou, CEO of TruBeacon, a payments technology company. "Many large retailers and important businesses have the ability to accept NFC transactions."

Philliou, who during his career in financial technology has worked with Brazilian financial institutions and retailers, said the region has been focused on extending financial products to underbanked consumers.  

"Brazil, for example, as been on the leading edge in terms of developments involving prepaid cards and inexpensive cell phones," Philliou said.