YellowPepper Raises $19 Million for Mobile Wallet in Latin America (Feb. 3, 2015)
Miami-based YellowPepper has closed a $19 million round of Series C funding to expand its mobile wallet in Latin America, where mobile money services are growing by 53 percent, according to a November 2014 report by NearShore Americas. YellowPepper, which has additional offices in Ecuador, Colombia and Mexico, processes 30 million transactions per month for approximately 5 million active users of its mobile banking platform, launched in 2007.
The funding round will be used to support the development and commercialization of Yepex, a new Android and iOS-based wallet that enables users to store payment cards and make purchases with a unique token that can be communicated to the merchant manually or via HCE or QR codes, according to a TechCrunch report. Banamex, the second-largest bank in Mexico, was the first to do a controlled test of Yepex and plans to launch a beta with users and merchants in Mexico.
YellowPepper CEO and co-founder Serge Elkiner told TechCrunch the tokenization system “drastically reduces” the fraud for card-not-present transactions, which is a major problem in Latin America. He also said tokenization improves the security for ATM transactions through a card and PIN-less withdrawal.
The funding round, which brings total investment to $34 million, was led by Mexican-based LIV Capital. Also participating was Mexico Ventures, a program managed by Sun Mountain Capital (a US.-based venture fund), Fondo de Fondos, International Finance Corporation/World Bank Group and an existing group of strategic investors.
YellowPepper is one of several companies offering mobile financial services in Latin America, where more than 60 percent of consumers are unbanked but most have mobile phones. Last month MasterCard CEO Ajay Banga said 16 million Movistar (Telefónica’s mobile brand in Peru) customers now have access to “Tu Dinero Movil” (”Your Mobile Money”), which he described as the first mobile money program in the country. MasterCard and Telefónica created a joint venture in 2011 to support mobile money initiatives in Latin America.
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