YellowPepper Spices Up Its Mobile Wallet Plan With New Investment

It’s not always easy to spark up new interest from investors these days, but the mobile wallet is one technology that often gets said investors to open up their real-world equivalents and dole out new cash.

YellowPepper, a startup mobile wallet system with its eyes focused on Latin America, is catching a lot of eyes with its plans for the field, and that interest has become particularly tangible with the completion of a new Series C funding round.

The funding round in question—led by Mexico’s LIV Capital venture capital firm, at last report—brought in fully $19 million for the company, and from several different sources.

YellowPepper has been quite hard at work in recent days, bringing out the Yepex “mobile smart wallet” system for Latin American use, an app which has already reportedly drawn quite an interest.

Reports suggest that, already, Yepex is currently in use in a “controlled pilot” system by the Banamex banking system—the second largest such banking system in Mexico—and further reports note that a beta version of Yepex is set to launch in short order.

Yepex itself, meanwhile, works ob both Android and iOS, which in turn allows users to store various debit and credit cards and make purchases, while at the same time not requiring some specific—and somewhat sensitive—information about the users, like the PAN, the CVV, or the card’s expiration dates. Instead, Yepex uses a token-based system to allow for much more rapid, and safer, connections, even when the users in question don’t have the very latest in smartphone technology.

Even in a market that’s highly competitive to say the least, Yepex enjoys some substantial market share; at last report, it processes over 30 million transactions a month from over five million customers—an average of six transactions per customer per month—and has an 85 percent market share in the Latin American market. That leaves competitors like Pademovil, and even PayPal going after scraps in the field, and gives Yepex a huge advantage right from the outset.

Indeed, Yepex is gaining a lot of ground reportedly because it’s eschewing one major technology: near-field communication (NFC).

Its use of the token system instead is allowing it to make new inroads in places where mobile payments technology is possible, but not so much where it depends on NFC for operations. Yepex doesn’t, and so makes itself available in places where NFC hasn’t made a lot of progress.

It’s strange to think that a company might actually derive an advantage by being technologically inferior to many of its competitors, but you have to bear in mind the importance of knowing one’s market.

If the environment can’t handle the technology, then putting such technology to use in the environment is just the same as shooting yourself in the foot. You gain no advantages, and you instead lose out on a big chunk of the market.

That’s a problem by any stretch, and one that Yepex seems to have well in hand with this strategic choice. It’s going to be interesting to see if it can hold its lead, or even gain new ground, but right now it looks like a very popular release.