The drop in revenue growth and margin in traditional telecom services has led Latin American operators to seek opportunities to provide new services and business solutions for verticals. The low value-added level of connectivity offers associated with end-user needs has also been a trigger for telcos, which are willing to monetize new opportunities through fresh business models. In light of that, operators consider mobile financial services as one of the future’s most promising revenue streams, evidenced by the creation of specialized business units for the service within telcos. Indeed, Brazil’s four major telcos – Vivo, Claro, Oi and TIM – have all partnered with banks, and other stakeholders, to provide mobile payment services.

Most mobile payment services focus on the unbanked population because they don’t have other options that permit them to make safe transactions. The targeted group is low-income users – sometimes with an income that changes from month to month – possessing feature phones or low-end smartphones and with a low awareness about new technologies. Thus, most payment services use text messaging or USSD technologies, as it doesn’t need 3G, nor consumes minutes/user data or requires app installation, therefore being simple and easy to use.

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