The newly set-up company will have a 50/50 ownership participation and it is set to combine Telefonica’s telecommunications assets and MasterCard’s payments expertise. The joint venture aims to ensure interoperability among the banked and unbanked segments and link the financial and telecommunications sectors.
The company expects to provide 87 million current and potential Movistar customers with mobile payment services which will be linked to a mobile wallet or prepaid account. The services are set to include money transfers, mobile airtime reload, bill payment and retail purchases. Additionally, some of these services (such as receiving remittances) are targeted at 200 million Movistar and non-Movistar mobile subscribers in the 12 Latin America markets included in the joint venture. It is expected that as a result of this initiative, acceptance of electronic payments be expanded to cash-based merchant locations and micro-businesses such as taxis and street vendors, allowing the latter to accept mobile payments.
The partnership will promote the financial inclusion of a high percentage of the Latin American population with difficult or no access to traditional banking systems.
Market research and customer surveys in Latin America both confirm that mobile phones are an appropriate tool for financial transactions. It is estimated that by 2014 mobile financial transactions will amount to USD 63 billion in Latin America.
Telefonica provides fixed and mobile telephony businesses with broadband. The company is present in 25 countries and has a customer base of 282 million accesses around the world.
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