MFS (Mobile Financial Service), a joint venture between Telefónica and MasterCard Worldwide, is launching Zuum, Brazil's first mobile payment service.
Initially, the service will be available in five cities in the state of São Paulo (Osasco, Sorocaba, Mogi das Cruzes, Jundiaí e Guarulhos) and in Belo Horizonte, capital of the state of Minas Gerais.
The service will enable Vivo's customers to have access to a pre-paid account on their phone that will allow them to transfer money, buy credits for Vivo's pre-paid mobile phones, and pay bills. Customers can also choose to receive a pre-paid card from MasterCard which is connected to the same pre-paid account. Customers can use the card to make purchases in more than 1.8 million affiliated establishments and withdraw money in Cirrus ATMs.
Zuum offers three clear benefits to the financial services market in Brazil: to help establish the concept of secure payments through mobile devices; to promote the financial inclusion of unbanked Brazilians; and to offer to the Brazilians an alternative payment service at the lowest cost possible.
"Brazil is a country that loves and invests in technology and has a big number of people without access to financial services in the classes C/D/E, the so called unbanked population. Zuum arrives to meet this demand and to make easier the life of Brazilians", says Marcos Etchegoyen, presidente of MFS.
How it works
Zuum uses USSD (Unstructured Supplementary Service Data) technology to enable users to access their accounts from their Vivo mobile phone, using any device. It's as simple as sending a text message, but without the cost. Signing up to the service is free and it's all done by dialing *789# from a mobile phone. Customers will then be able to start using the account. Customers can also use their phones to transfer money, buy prepay credits from Vivo, consult balances and, soon, pay bills.
"With Zuum it's possible to do all this securely and with the convenience of having all these functions in a simple mobile phone, without the need to download apps, accesss the mobile internet, or own a smartphone", explains Etchegoyen.
There's no maintenance fee for the account or the card. There's a single fixed cost to purchase the card. Transactions are charged small taxes that are reversed into bonus credits for the mobile phone. Users that choose to purchase the card will also be invited to participate in the MasterCard Surpreenda reward program.
For years, the Brazilian market has been waiting for mobile payments to become a reality. Zuum is the first commercial service of its kind available in Brazil. The service starts in May, in São Paulo state cities and in the capital of Minas Gerais state and it will be expanded to other regions. MFS predicts that it will have a national coverage by 2014.