Mobile payments in Brazil. Opportunities and Challenges.

In the recent past, have been changes in the Brazilian regulation and some partnerships with telecommunications companies and financial institutions indicating that the mobile payments industry in Brazil has great potential for growth.

The measures implemented by the Central Bank of Brazil in 2013, to a certain extent are related to the growth of the mobile payment industry in the country. In fact, Brazilian financial systems, as well as their payment systems, are modern and with great ability to adapt to the future, especially when compared with other countries systems.

Within these measures, one of which had most impact was Law 12,865, which allows payment institutions without any belonging to banks, can provide financial services as long as authorized by the Central Bank. Thereby, these institutions can manage virtual wallets or accounts; allow the withdrawal of deposits, transfers, among other operations previously restricted to traditional banks. It also provides the entire legal basis for the telecommunications services providers offer the mobile payment services. The exchange between each service of operations is guaranteed, taking into account the high number of mobile payments initiatives, which will be of major importance.

Although these institutions are allowed to do the operations said above, the Brazil Central Bank has the right to regulate, authorize and supervise them.

Mobile payments in Brazil

First, mobile payments had great importance and growth in African countries. This is because most of their population were not holders of bank accounts and there was only one large mobile operator in most countries. As these countries, Brazil still has a large number of people without access to bank accounts (55 millions of adults, according to Ipea), but in turn the implementation of mobile phones was on a large scale (according to Anatel, from June 2015, exists 282.400 thousand activations in the Brazilian mobile phones), and the Brazilians adopted this communication device regardless of age, region or social class.

However, unlike the African countries, there is great competition in the market, with 4 major companies, holding 15-30% of the market share. Because of this, interoperability between the services of mobile operators is very important since it would allow users to make the necessary transactions between the various competitors.

In fact, it is a concern to the institutions that are basing their activity in mobile payments, to make sure that the greatest ones have an interface between themselves.

For example, Zuum has a partnership with Vivo and Mastercard, with a solution of mobile payment where the users can register accounts just asking the name and CPF. That way, is simple to open your account in Zuum. You can make a deposit from numerous POS machines registered in the country and transfers between accounts, with a limitation of USD 1.300 monthly. This one works with banks like Itaú, Santander, Bank of Brazil and HSBC, and the users with accounts on these banks are allowed to make deposits from their accounts to their mobile accounts, all online. This service gives the choice to issue a credit card and it count with more than 410 thousand of users. This number expresses the large market of mobile payments services in the country.

Just like Zuum, you can find the  solution Oi Carteira, with the same services of mobile payments, only differing in associated banks. So, if you have a bank account, make sure to operator that is linked with your.

Multibank, Carrier TIM, Savings Bank and Mastercard, has launched the mobile payment service in three Brazilian cities (Natal, Uberlândia e Curitiba) and it offers all the services that Zuum gives you. Startups like PopRecarga, Nubank and are connected with all these challenges and opportunities.

Author: Team Fintech Brazil

Mapping Fintech Companies in Brazil

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