In Mexico, where 90 per cent of mobile phone accounts are prepaid, point-of-sale activated (POSA) systems for the electronic recharge of airtime are now being installed at retail locations. Most retailers in the country use paper-based vouchers to sell prepaid airtime, but recent market trends indicate that demand for electronic top-up solutions will grow in tandem with the anticipated explosion in prepaid phone adoption. Vendors of prepaid airtime are shortly predicted to begin using POSA channels such as terminals, ATMs, kiosks and the Web to deliver real-time prepaid products to consumers.
Multiple prepaid products including phone and stored-value cards can be delivered via POSA systems, which help retailers eliminate physical card inventory and minimize the risk of ‘leakage’ to theft. Virtual prepaid airtime voucher delivery at the POS is seen as an opportunity by solutions providers such as Maximum Dynamics, which has had discussions with Mexico’s main telecom firms. The expected growth in POS terminalization in Mexico this year under a government program to promote e-payments will also catalyze the sale of POSA prepaid airtime as retailers see the potential for additional revenues.
Card payments are now accepted by approximately 100,000 merchants in Mexico and a November law passed by the government, could quadruple e-payment acceptance in the country by subsidizing POS equipment, according to First Annapolis. Retailers see the cost of POS systems as a major hurdle to greater card payment acceptance, but First Annapolis’ predictions are based on an average cost of USD 300 per POS terminal, at an average of two terminals per merchant. If prepaid POSA software is installed on a large proportion of these terminals, the business case for terminalization by merchants is enhanced.