MasterCard launches mobile payments gateway

Itau Unibanco and Redecard, along with mobile network operator Vivo, will be the first to use the MasterCard Mobile Payments Gateway to deliver mobile payment solutions to the banks' customers in Brazil. The service will give consumers the ability to use their phone as a mobile wallet and link their existing credit, debit or prepaid MasterCard or Maestro card accounts to their mobile phone to fund mobile-initiated payments.

The Mobile Payments Gateway is a turnkey mobile payment processing platform that allows issuers, acquirers, merchants and mobile network operators to quickly and cost-effectively provide customized mobile solutions in developing payments markets by tapping into the MasterCard Worldwide Network, the payments industry's only fully globally integrated network. As a result, banked and unbanked mobile consumers gain access to a wide range of MasterCard Mobile payments solutions that provide greater payment convenience and security over cash--using their mobile phone to make purchases, send and receive money between family and friends, transfer funds between accounts, pay bills, deposit funds such as payroll or social benefits, top up mobile airtime, load value to prepaid accounts, get cash from ATMs, and keep track of their balances and activities with mobile alerts.

MasterCard is working with Smart Hub, Inc. (SMART HUB, a subsidiary of Philippine-based Smart Communications, Inc.) to leverage its mobile payments technology to develop the MasterCard Mobile Payments Gateway. Requirements for development of a mobile payments infrastructure vary from market to market. By integrating SMART HUB's capabilities, MasterCard has created an open mobile payment processing platform through the MasterCard Payments Gateway to facilitate the launch of MasterCard Mobile payment solutions in developing markets.

MasterCard is helping to transform financial services with mobile innovation to fulfill a global market need. Consultative Group to Assist the Poor (CGAP), an independent policy and research center housed at the World Bank, and the GSMA Association report that there are more than 4 billion people worldwide who have a mobile phone, but far fewer mobile phone users have a bank account- with the number to grow from 1 to 1.7 billion by 2012(1). The Mobile Payments Gateway enables them to benefit from secure and convenient mobile payment services that were previously unavailable to them. At the same time, participants in the mobile payments value chain can realize the significant potential for mobile growth outside of the markets they traditionally serve--providing opportunities for financial institutions to introduce payment and financial services to unbanked consumers and mobile network operators to offer value-added services for mobile payments.

"The Mobile Payments Gateway will help to make mobile payments a way of life for mobile phone users around the world," said Joshua Peirez, group executive of Innovative Platforms for MasterCard Worldwide. "Through our global, integrated payment network we are efficiently connecting financial institutions, merchants and consumers together to mobilize MasterCard payment solutions in a way that truly reflects today's on-the-go lifestyles."

"We are pleased to introduce a mobile payments solution that reinforces our innovative positioning in the market," said Fernado Teles, managing director, Itau Unibanco Holding. "For Itau, it is important to not only bring cutting-edge products but also ensure that it offers our customers the security and convenience they expect from a banking transaction."

"The MasterCard Mobile Payments Gateway is complementary with the existing Redecard solutions and we are honored to be part of this project," says Roberto Mediros, President and CEO of Redecard. "This platform reinforces our leadership in mobile payments solutions. This is a breakthrough for mobile payments around the globe. Democratization and innovative solutions have always been priorities for Redecard and the MasterCard Mobile Payments Gateway is precisely aligned."

"Vivo, the largest mobile operator in Brazil with over 48 million customers, is a natural choice for this partnership, due to its installed user base and broad service outreach, in more than 3,400 cities nationwide," according to Hugo Janeba, Vivo's Executive Vice President of Marketing and Innovation. "This is an important service we are glad to offer to our customers, empowering their connectivity so they can make the most out of their mobile phones. The mobile payments market is an expanding opportunity in the local scenario and we are sure this initiative will be a success."

"While in the region there are some mobile payments solutions in the market that help unbanked mobile users transfer money or top-up prepaid accounts, these solutions have been limited in providing the breadth of payment transaction services for the underserved consumer to completely manage their finances," said Richard Hartzell, president, Latin America and the Caribbean region, MasterCard Worldwide. "I am pleased that the Latin America and Caribbean region will be the first to offer the MasterCard Mobile Payments Gateway, which will benefit every constituent in the payments ecosystem--helping financial institutions and mobile network operators reduce their mobile operating expenses and costs to serve consumers while enabling merchants to cost-effectively expand payment acceptance using their mobile phone. This will allow consumers to enjoy a more robust suite of mobile payment services that makes their lives easier."

Following the launch in Brazil, MasterCard will introduce MasterCard Mobile payments solutions through the Mobile Payments Gateway in select markets around the world.

"Successful growth of mobile payments around the world requires participation, communication and collaboration among all members of the mobile payments value chain," says Napoleon L. Nazareno, President and CEO of Philippine Long Distance Telephone Company and Smart Communications, Inc. "We are excited to build upon a successful history with MasterCard to advance mobile payments innovation in the industry by delivering compelling solutions that combine the global MasterCard brand and world-class payment network with our extensive digital telecommunications capabilities and world-first wireless data services."

(1) CGAP-GSMA Mobile Money Market Sizing Study, June 2009