Mobile Pay, E-Commerce Gains Momentum in Panama




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Panama has been trying to market itself as a Latin American tech hub for quite some time now, and now with mobile payments and e-commerce, they’re keeping to that promise. Although Latin America, in general, has been slower than other parts of the world to adapt to the e-commerce market, Panama is looking to change that in the immediate future. And international investors and startups are looking at investing in Panama as an ideal growth market for this type of commerce.

The consumer market in Panama is strong, and buyers need more options on how to shop, pay, and assign delivery for products and services. Mobile payments, innovative apps, and creative e-commerce websites could offer a viable, and profitable solution for both businesses and consumers; and that’s a win/win for Panama’s economy. 

A saturated smartphone market that’s primed for mobile payments and e-commerce

One of the main reasons Panama is primed for mobile pay and e-commerce is its smartphone saturation. In Panama, smartphone penetration is close to 100%, meaning that nearly every person within the demo of a smartphone user owns and uses one. And that’s huge for business in 2016. Being able to buy, research, and pay for products/services on your smartphone makes business more efficient for the Panamanian consumer, even if it’s something they’re not used to. There’s lots of room to grow and innovate because the market is already there. Purchasing power is expanded greatly with smartphones, and when combined with easy mobile payment solutions, the possibilities are endless for the market.

Innovative businesses designed for the Panama market

Another reason Panama is primed for e-commerce is the nature of how business is done here. In Panama City and its suburbs, traffic, time, and access to brick and mortar commerce can be difficult for a large part of the population. But that part of the population is still buying. Therefore, creating innovative apps and websites that make it easier for people to bank, shop for goods, book services and travel, and save time is absolutely in demand. Panamanians can now order pizza, book a flight, reserve a table at a restaurant, hire a taxi, and find a mechanic, all from their smartphone. They can also pay for it with the touch of a button. But wait, there’s a catch.

Overcoming the “unbanked” hurdle

Despite having a great consumer market that’s primed and ready for e-commerce, there are a few hurdles businesses have to address before investing in Panama. One of these biggest hurdles is disrupting the cash economy. Despite having around 100 different banks operating out of the country, many Panamanians are “unbanked”, meaning that they don’t have a checking account, or a bank account at all. And even if they have a bank account, there is a cultural trend to use cash only for small purchases. 

Another hurdle e-commerce business operating in Panama have to face is finding a merchant account that can be attached to a Panama bank account. This has typically stalled a lot of e-commerce businesses to date, but it is expected to become too lucrative of a market for banks to balk at this any longer. The future of e-commerce is inevitable, and Panama banks are expected to become more welcoming of online businesses as demand continues to increase.

This is where mobile payment services come into play

The future of e-commerce in Panama, in our opinion, has to rely on simple, efficient mobile payment services. Much like in other markets in the U.S., Africa, Asia, and Europe, companies are testing new mobile payment services that could allow Panamanians to charge cash onto their phone for mobile credit (much like how telecom services work in the country). Once the money is on the smartphone, it can be used through various e-commerce apps, or in person at shops or services. This will allow Panamanians a new level of purchasing power, which should open a huge selling potential for both traditional businesses and new companies alike.

While full-scale e-commerce and mobile payment rollout might not be prevalent to the casual observer now, look for major movement within the next 2-3 years. You should see Panama’s heavy services-based industry adapt first, with bigger commodities industries soon to follow. Business as usual as we know it in Panama is changing at the speed of technology, and it’s exciting to see where this will lead.

About Manoj Chatlani


Manoj Chatlani is a Senior Partner at POLS Attorneys, a full-service law firm in Panama City, Panama. Specializing in offshore services, including asset protection, estate planning, offshore banking, and offshore corporations, as well as Panama immigration and real estate transactions, Panama Offshore Legal Services offers clients a streamlined solution to all their Panama legal needs. Manoj is a Panamanian lawyer and holds a law degree from USMA and earned a Masters in Communication Law and Panama Tax law.

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