Telefonica and MasterCard have set up a joint venture to offer mobile payment services in Brazil to the subscribers of Vivo, the mobile operator in which Telefonica holds a majority stake. The venture will create a mobile wallet so that Vivo subscribers can make P2P payments via their mobile phones as well as move funds, pay bills and buy goods online. Vivo has a significant customer base of 68.5 million subscribers (end-October figures) for the new venture to target, according to Wireless Intelligence figures. The new company will operate independently with both partners holding 50 percent of its equity. There was no announcement about a service launch date. The joint venture will need regulatory approval in Brazil. MasterCard pointed to the potential benefits for financial inclusion from the new venture. It will enable more transactions between the banked and unbanked, it says. For instance, vendors who have traditionally only accepted cash, such as taxis, delivery services and door-to-door sellers, will be able to accept mobile payments.
This is not the first alliance between Telefonica and MasterCard. The two companies signed an agreement in January this year to offer mobile payment services in 12 Latin American countries where Telefonica is present with its Movistar brand (as opposed to working through Vivo). This previous agreement was also a 50-50 venture and promised similar services. As a sign of the growing activity around mobile money in Latin America, Telefonica’s great regional rival America Movil announced a joint venture with Citigroup to offer mobile banking throughout Latin America just one month ago.