Brazil’s third largest operator Claro has teamed with leading bank Bradesco so that subscribers can pay for goods in retail outlets using their mobile phones, starting in the state of Sao Paulo.

The NFC-based service will work at more than 200,000 payment points in retail outlets when it launches in the first half of this year, according to the project’s vendor Giesecke & Devrient (G&D).

The service will later be expanded to other parts of the country.

G&D told Mobile World Live that the deployment will be the first commercial NFC-based mobile payment service in Latin America.

There have been mobile payment services in the region before, including one between Bradesco and Vivo, a rival of Claro. However, services in the region often target unbanked users are not generally equipped with NFC-enabled smartphones.

G&D estimates the nationwide market potential for the service at 85 million users.

G&D is supplying the SIM cards with secure storage for the payment software, as well as a mobile wallet for smartphones, which contain information such as credit/debit card numbers and account details.

The vendor is also providing the Trusted Service Manager (TSM) solutions to both Bradesco and Claro. The TSM solution enable customers to receive Bradesco account holders’ payment card information on their devices in an encrypted form via Claro’s mobile network.