MasterCard and the Brazilian unit of Spain’s Telefónica have created a joint venture to offer mobile financial solutions, or m-payment, for 65 million Vivo consumers in Brazil. The initiative aims to create a mobile wallet allowing consumers to make payments via their mobile phones as well as transfer funds, pay bills and make online purchases.
In statement, Richard Hartzell, president for MasterCard in Latin America, said the initiative “puts the company at the forefront of mobile payments in the region.”
The new company will operate independently with each shareholder holding 50% of the equity. The joint venture still needs to garner regulatory approval.
M-payments are just beginnig in Brazil and is expected to take awhile before the offering gains traction with consumers. One of the biggest question for consumers is why would they use a m-payment solution if they already have a credit card?
“I believe everyone is wondering to have some initiative in m-payment. We’ve been doing that for five years. The infrastructure technology is ready, but business models are still in trials,” Cicero Torteli, Freedom’s CEO and founder, told RCR Wireless News earlier this year.
According to MasterCard and Telefónica, the joint venture is aimed at promoting financial inclusion for Brazilian consumers, allowing operations between banked and unbanked consumers and fostering the acceptance of mobile payments in locations that traditionally have only accepted cash transactions, such as taxis and delivery services as well as direct sales such as door-to-door transactions.
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