América Móvil’s Brazilian wireless unit, Claro, and Brazil-based Bradesco, one of the largest banks in Latin America, announced plans launch two mobile payment services in 2013. The solutions result from a joint venture the companies formed last year, named MPO (Mobile Payment Operator). Both products — a co-branded virtual wallet tied to a mobile line and a solution to enable transactions via near field communications — are in the development phase.
While service details remain scarce, the announcement can be considered big move forward for Brazilian mobile payments. M-payment services are being developed across Brazil, but several issues have delayed the process including policies and regulations as well as the development of a business model that fits all of the potential players, especially banks and carriers.
“We think the scenario is really propitious right now, since 46.8 million people do not have bank account and 83% of payments are in cash for under R$20 [$9.50],” said Carlos Zenteno, Claro’s president, during a meeting with journalists in São Paulo.
According to the latest numbers from Brazilian telecom regulator Anatel, Brazil ended October with 259.29 million mobile lines. Of those, 209.88 million or 80.9% were prepaid connections.
“Mobile phones are in everybody’s lives. Many people who do not have bank accounts have mobile lines,” said Bradesco executive director Candido Leonelli.
Bradesco director Márcio Parizotto also noted that policymakers were interested in this new technology. “There is a favorable government agenda to make m-payment work,” he said.
Claro will be bring its knowledge of low-cost transactions to the products, and Bradesco will take care of the credit, financing and banking processes. The companies said they have conducted studies of their customer bases to identify common and target customers. During the press conference in São Paulo, company officials said a virtual wallet solution linked to mobile line services will launch by mid-2013, and NFC payments will launch in the second half of 2013.
The virtual wallet is a co-branded solution focused on people who don’t have bank accounts, especially those who own prepaid mobile phones. It will work the same way as a prepaid card, allowing customers to get cash from Bradesco’s ATMs, shop, pay bills, and transfer money to other Claro virtual wallet customers.
“Shopping or other financial transactions will be possible via SMS and/or USSD. It has to be simple and designed for feature phones to work,” said Fiamma Zarife, Claro’s director of value added services and roaming. However, customers can also request a physical prepaid debit card.
Under these terms, a key part to making this product work is enabling stores to receive payment via SMS or USSD. “About 300,000 merchants from Cielo [who currently manages the Visa merchant acceptance network in Brazil] will be ready to accept this,” said Parizotto.
Claro and Bradesco will split revenues from the joint offering.
The NFC solution, which the companies plan to launch by the second half of next year, will focus on clients with greater purchasing power — those who are able to purchase an NFC-enabled smartphone. “We are in talks with GSMA, who has an initiative with device manufactures to unveil a terminal with at an attractive price. GSMA is looking at 2014 FIFA World Cup to popularize NFC solutions,” said Claro president Zenteno.
During GSMA’s Mobile NFC event held earlier this year in São Paulo, the association said it was looking to show that NFC is moving from trials to its first commercial launches. Brazilian mobile network operators have carried out a number of trials with Banco do Brasil, Viva and Vivotech. GSMA’s NFC go-to-market program focuses on expanding collaboration, interoperability and ecosystem development.