MasterCard is part of a joint venture that will launch the Zuum mobile payments service this month. The venture is touting Zuum as the first service of its kind in Brazil.

Mobile Financial Service, a joint venture between Brazilian mobile operator Telefonica and MasterCard, will initially target five cities in the state of Sao Paulo. MFS aims to have Zuum in place throughout Brazil by 2014.

Customers of Telefonica’s Vivo prepaid mobile phones will have access to a prepaid account on those phones that will allow money transfers and payment of bills. They will also be able to buy credits for the prepaid mobile phone, MFS says.

Vivo phone users can sign up for the free Zuum service by dialing from their phone.

In addition to the mobile prepaid account, customers can choose to receive a MasterCard prepaid card connected to the same account. Customers would need the card to make purchases at retail outlets accepting MasterCard, or to withdraw cash from Cirrus ATMs.

The card carries a single fixed fee and the taxes on transactions are reversed into bonus credits for the mobile phone, MFS says.

“Brazil is a country that loves and invests in technology and has a big number of people without access to financial services … the so-called unbanked population,” MFS president Marcos Etchegoyen states on a Telefonica blog.

“Zuum arrives to meet this demand and to make easier the life of Brazilians,” Etchegoyen adds.

This year, MasterCard introduced a different mobile payment capability in Brazil through its PayPass contactless technology, allowing payments through the tapping of smartphones on Near Field Communication-enabled readers at point-of-sale terminals.

While MFS works to establish the Zuum mobile pay system, PayPal has made overtones to Brazilian carriers regarding its Zong direct carrier billing system. PayPal parent, eBay Inc. acquired Zong in July of 2011.

The creation of the PayPal Carrier Payment Network eight months later illustrated the company’s interest in parlaying the carrier relationships established through Zong into mobile payment services in various markets. 

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