A Brazilian company, controlled by the private equity investment group Apax Partners, is betting on a new business model—one which does not require end users to access their data plan each time they make a transaction—to develop the m-payment market in Brazil. Dubbed PagCell, the solution is designed to work like a credit card, as Fabiano Funari commercial director at Tivit told RCR Wireless News. “Customers still have limited data traffic, so we developed a solution in which storekeepers need to have data access and not the person who is buying,” Funari explained.
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To use PagCell, customers have to download an application to their device, which once installed, does not require any further data access. Next, customers complete a form, adding their information, such as the bank account or credit card number that they want to be charged. Then, PagCell works similar to a token, generating QR codes that can be read by storekeepers’ equipment.
Participating stores will have to install the software in devices with embedded cameras (such as smartphones, tablets or PCs). So instead of using credit card terminals, they use PagCell, inserting the value of transaction and using the camera to read QR code.
Tivit’s PagCell suggests a business model that does not violate Brazilian rules. Under the country’s laws, telecom companies cannot process financial transactions. The fact that carriers and banks have not teamed up yet has been the biggest barrier for mobile payment development in Brazil. PagCell aims to transform cellphones into credit cards without using the mobile phone to actually perform the transaction.
“It is a new means of payment. We install a token in the cellphone so stores can authenticate the transaction, as happens with credit and debit cards today,” Funari said. There are no customers yet in Brazil, but Funari said Tivit is negotiating with banks and acquiring and payment processing companies. In Mexico, a transportation company has bought the solution.
In Brazil, the lack of an m-payment business model still hinders development, especially because telecom operators and financial institutions have not reached agreement about who should be responsible for each part of the mobile payment process. In addition, there are no defined standards, as IT leaders of the biggest Brazilian banks pointed out recently.
Apax Partners owns 97% of Tivit, an integrator and BPO service provider in Latin America. The remaining 3% of the company is owned by its founder and current CEO, Luiz Mattar, who is also a former professional tennis player.
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