YellowPepper: Doing 25 Million transactions a month in Latin American and Caribbean Markets

YellowPepper Holding Corporation was established in 2004 by Serge Elkiner. YellowPepper is a mobile financial network in Latin America and the Caribbean. The focus of the company has shifted from providing value added services to exclusive mobile financial services in 2007. YellowPepper operates in 9 countries: Mexico, Colombia, Peru, Ecuador, Guatemala, the Dominican Republic, Bolivia, Haiti, and Panama. It claims to provide services to 4 Mn customers to execute over 25 Mn transactions per month.

In 2010, the International Finance Corporation (IFC) made a $3 Mn equity investment in YellowPepper. In addition, IFC was instrumental in YellowPepper receiving a $2 Mn investment from the family office of an unnamed private Latin American investor. In May 2011, YellowPepper received a $500,000 grant from Haiti Integrated Finance for Value Chains and Enterprise (HIFIVE), a USAID-funded project, to support the development of mobile money services in Haiti. IFC further invested $15 Mn in August 2013.The total funding acquired by the company amounts to $20 Mn.

Business Model

YellowPepper offers mobile financial services to Banks, Mobile Network Operators (MNOs), utility providers, and Fast Moving Consumer Goods (FMCG) companies. YellowPepper enables them to transact with unbanked and banked customers, distributors, and suppliers. Some of YellowPepper’s products and solutions include:

1. Traditional mobile banking (m-banking) services- For individuals with bank accounts: It enables the banks to deliver financial services via mobile phones to existing bank account holders. Customers can easily and conveniently access their bank and credit card accounts, check account balances, transfer funds and receive fraud alerts. This services also allows users to make various types of payments available through their mobile phones

2. Mobile wallets (m-wallets) – For individuals without bank accounts: m-wallet is a virtual, pre-paid account accessed using a mobile. m-wallet customers access the YellowPepper network via user-friendly interfaces. Customers get access to services such as text messaging and USSD, to remit money, pay utility bills, recharge mobile phone airtime, and pay for goods. In addition, the m-wallet offers unbanked customers integration into formal financial networks. m-wallets are issued by banks in association with YellowPepper and MNOs. They can be purchased from correspondent-banking agents that YellowPepper engages and develops in the country of operation.

Customers open m-wallet accounts with correspondent banking agents by purchasing m-wallet kits. They also need to complete the necessary paperwork, providing their addresses and identification information. Initial cash deposits made through the agents are credited to the customers’ new m-wallets. They then receive text messages notifying them of their available balances. Thereafter, they can visit an agent to deposit additional cash or to withdraw cash by sending a text message request.

3. Business-to-business (B2B) mobile payments network: This mobile payments network targets FMCG companies and their distribution channels in Latin America. Some of the distributional channels include range from hundreds to thousands of small mom-and-pop shops throughout Latin America. This product enables these retailers to pay their wholesalers for goods upon delivery using m-wallets rather than cash.

In Ecuador, YellowPepper is working with six FMCG companies whose products constitute 85% of the product inventory of these small shops according to a report by The company, shop and the bank use text messaging for transactions via YellowPepper’s network.

In 2011, YellowPepper was shortlisted for the Financial Times-IFC Sustainable Finance Award. YellowPepper also received the USAID / HIFIVE Grant for Establishing Mobile Financial Services in Haiti.

DineroMail and MercadoPago are the largest players in the online payments industry in Latin America according to partnersinprepaid. DineroMail claims to provide stored value accounts used for online P2P transfers for paying for purchases on auctions, E-commerce sites and marketplaces. Gateways are provided to enable online merchants to accept payments via multiple methods like credit cards, bank transfers ,cash deposits etc. DineroMail processed 8.8 Mn transactions worth USD $510 Mn in 2011, according to partnerisprepaid. Other companies competing with YellowPepper include NovoPayment, Xoom and Adyen.

LTP View: 580 Mn people living in Latin America and the Caribbean have approximately 439 Mn mobile phones, a 78% mobile phone penetration rate. An estimated 377 Mn people (65% of the region’s population) lack access to adequate financial services according to a report from This may present as a significant opportunity for mobile financial service providers in Latina America such as YellowPepper.