The first mobile financial service (MFS) launched by a telco in Latin America was in 2008 with Tigo Cash. Tigo was aimed towards the unbanked population in Paraguay.
Since then, the number of MFS offers in Latin America increased significantly, with most of them falling into the category of mobile wallets such as Transfer by Telcel, Zuum by Vivo Brazil, and Tigo Money by Tigo.
Features and transfers
Transfer is a standout offering in Latin America. It is the only cloud-based P2P mobile financial service app with the function to pay bills and make ATM withdrawals. In addition, users can send and receive payments, and manage account and balance information.
While Zuum digital wallet is the only service which offers a prepaid MasterCard card, with a single payment of $4.49 (R$14.90) for making purchases and withdrawals.
In order to leverage usage and adoption of their MFS solutions, telcos are adding more features into their mobile financial portfolio and also developing value-added services through partnerships.
In 2016, Tigo added remittance service into its Tigo Money portfolio. This was achieved through a partnership with World Remit, Money Gram, and Western Union. Tigo, in conjunction with BIMA, also added mobile insurance services to its MFS portfolio in Paraguay.
Telcos are also implementing rewards and loyalty programmes attached to their MFS portfolios. Users can get benefits such as minutes of use in their traditional mobile voice plans. This can even get discounts at select retailers.
Nevertheless, most of the MFS offers available have not reached the desired scale, thus not allowing telcos to properly monetise.
The MFS market is going through a period of increased comeptition. Tech companies (Google Pay and PayPal), financial institutions (BBVA Wallet in Mexico and Ourocard-e in Brazil) and mobile device manufacturers (Samsung Pay and Apple Pay) launching their own MFS solutions are congesting the market.