IFC ADVISORY SERVICES | ACCESS TO FINANCE 94736 IFC Mobile Money Study 2011 Brazil In Partnership with the Republic of Korea IFC ADVISORY SERVICES | ACCESS TO FINANCE IFC Mobile Money Study 2011 Brazil In Partnership with the Republic of Korea International Finance Corporation 2011. All rights reserved. 2121 Pennsylvania Avenue, N.W. Washington, DC 20433 Internet: www.ifc.org The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. IFC encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly, and when the reproduction is for educational and non-commercial purposes, without a fee, subject to such attributions and notices as we may reasonably require. 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Additionally, “International Finance Corporation” and “IFC” are regis- tered trademarks of IFC and are protected under international law. Contents Foreword..................................................... ix 6. Conclusion..............................................34 Acknowledgments...................................... xi Appendixes Abbreviations............................................ xiii A. Fact Sheet and Demand Estimates................... 35 Summary.......................................................1 B. Persons Interviewed......................................... 40 Introduction..................................................5 References..................................................42 Study Focus............................................................5 Box Socioeconomic Country Context...........................5 5.1 Update on New MNO-Bank Partnership... 31 1. Demand Perspective.................................7 Figures 2. Bill Payments (Utilities)..................................... 8 2.1 Potential Monthly Transactions in Key Person-to-Person Transfers...................................... 9 Mobile Money Market Segments in Brazil.... 7 Government-to-Person Payments...........................9 2.2 Shares of Transportation Modes.................. 10 Public Transport...................................................10 2.3 PMC Annual Disbursement.......................13 Business-to-Business or Business-to-Employees 2.4 Annual Household Net Savings Rate.......... 14 (Payroll) Transfers............................................ 11 3.1 Brazil’s Mobile Money Market in the Credit and Microfinance...................................... 12 Porteous Regulatory Environment Model... 16 International Remittances ................................... 14 3.2 Top Five Banks by Deposits........................19 Savings................................................................. 14 3.3 Services for Which Correspondent Banks Are Used..................................................... 19 3. Parameters of the Mobile Money 3.4 Geographic Distribution of Correspondent Ecosystem....................................................16 Banks..........................................................20 Enabling Regulation.............................................16 3.5 Access Channels to Financial Services.........21 Existing Access to Financial Services..................... 18 3.6 Market Shares of Major Mobile Operators.. 21 Existing Mobile Access and Market Situation....... 21 3.7 Vivo 2G Network Coverage in Brazil, Retail Sector.........................................................23 2010........................................................... 23 4.1 Socioeconomic Characteristics of Mobile 4. User Survey Findings..............................25 Money Users and Nonusers ....................... 26 Socioeconomic Profile of Respondents................. 25 4.2 Oi Paggo Services Used............................... 27 Nonuser Survey....................................................27 4.3 Top Three Reasons for Using Oi Paggo Services....................................................... 27 5. Business Models......................................29 4.4 Trip Length to Withdraw Cash................... 27 Existing Business Model: Oi Paggo....................... 29 4.5 Cost of Trip to Withdraw Cash................... 28 Banks...................................................................31 4.6 Perception of Relative Expense of Mobile Mobile Operators: Vivo........................................ 32 and Traditional Banking.............................28 Industry Association Approach............................. 33 4.7 Degree of Trust in Financial Services........... 28 vii  viii  IFC Mobile Money Study 2011: Brazil 4.8 Perceived Mobile Money Benefits ..............28 2.2 Taxi Distribution by City Population Size... 11 4.9 Interest in Using Specific Mobile Banking 2.3 Main Microfinance Institutions by Services in the Future .................................28 Number of Borrowers.................................13 3.1 Parameters Affecting the Success of Mobile Tables Money Services........................................... 17 S.1 Mobile Money Opportunities in Brazil.........3 3.2 Access to ATMs and POS Devices by 1.1 Distribution of Household Monthly State........................................................... 22 Income Levels in Brazil and Its Major 3.3 Financial Data for Key Mobile Operators...21 Regions, 2008 (%)........................................6 5.1 Oi Paggo Business Model........................... 30 1.2 Monthly Income...........................................6 A.1 Fact Sheet................................................... 35 2.1 Potential Mobile Money Market Segments...7 A.2 Demand Estimates...................................... 38 Foreword F inancial inclusion—access to a range of Mobile technology is a channel that, once in financial services and products for every- place, allows for the delivery of other low-cost one needing them, in a fair, transparent, financial services bringing banking to unbanked and cost-effective manner—is a goal of IFC and underserved people. Mobile money—the (International Finance Corporation) and a prior- transfer of funds using cell phones—is an innova- ity of the Group of 20 development agenda. tive method for both individuals and small busi- nesses to transfer money. Mobile money is becom- IFC has committed to achieving greater financial ing common in developed countries for small, inclusion by 2013 by providing more diversified frequent payments such as mass transit fees. In financial services and by deepening outreach to some developing countries, it offers an opportu- microclients and small and medium enterprises. nity for unbanked people to pay bills and transfer IFC also helped support and shape the G20 global funds without using cash. Some businesses use it financial inclusion agenda that calls for the pro- throughout their supply chain. motion of a range of financial services beyond credit—including payments, savings, remittances, Why has the development of mobile money sys- and insurance. tems been so successful in some countries, yet seem blocked in others? What can be done to More than 2.7 billion people in developing coun- encourage its development globally? tries do not have access to basic formal financial services, such as savings and checking accounts. This report looks at the technology required and Many governments have made savings accounts the business models used by mobile network oper- widely available, but to make payments and trans- ators, banks, and others in four developing coun- fer funds, the poor must often depend on costly tries—Brazil, Nigeria, Sri Lanka, and Thailand. It and unreliable informal financial services. Low compares these countries with Kenya and Japan, levels of financial inclusion also represent an which have successfully developed mobile money obstacle to economic development. operations, and with the United States. Developing innovative methods of retail payments Perhaps more importantly, it offers a framework is essential to increasing financial inclusion. New for a quick market study of a country to determine technologies and new business models are open- whether or what type of mobile money services ing new methods of retail payments, as well as bill might be developed commercially. It offers models payments and transfers of funds among people of user perception and demand surveys, then and businesses. develops a set of parameters—such as regulatory ix  x  IFC Mobile Money Study 2011: Brazil environments, current access to financial services, telecommunications equipment and handset and the requirements of potential mobile money manufacturers, and others that could be involved service providers to run viable businesses—that in the development of mobile money businesses. can spur or block mobile money development. By using these survey techniques and examining I would like to express sincere thanks to the gov- the relevant parameters, a government or develop- ernment of the Republic of Korea for its support ment agency can assess a country’s potential for a of this study through the Korean Trust Fund. successful mobile money business. We hope this report will contribute to mobile money business development globally. It is Peer Stein intended for regulators, mobile network opera- Global Business Line Leader tors, commercial banks, microfinance institutions, IFC Advisory Services, Access to Finance Acknowledgments T his study was commissioned to increase Dialog in Sri Lanka, and TrueMoney in Thailand. understanding of mobile money (m-money) Other organizations, companies, and individuals and help address key issues in scaling up in each country gave generously of their time and further development of m-money ecosys- knowledge, including the Central Bank of Brazil, tems globally. the Central Bank of Nigeria, the Central Bank of Sri Lanka, and the Bank of Thailand. Appen- First and foremost, we are grateful to the govern- dix B of each country report lists the many people ment of the Republic of Korea for its leadership interviewed during the study; their participation in the area of information and communications is greatly appreciated. technology for development, and for funding this study to promote the m-money agenda for the The following IFC and World Bank colleagues public benefit. in the respective countries provided local insights and liaison with the above-mentioned partner- Intelecon Research and Consultancy Ltd of Van- ing institutions, and helped the team conduct couver was contracted by IFC (International meetings and field surveys: Alexandre Darze and Finance Corporation) to conduct the IFC Mobile Terence Gallagher (Brazil), Theophilus Adewale Money Study 2011, including in-country field- Onadeko (Nigeria), Asela Tikiri Bandara Dis- work. Andrew Dymond, Steve Esselaar, and sanayake (Sri Lanka), and Frederico Gil Sander Sonja Oestmann authored the reports, assisted and Ratchada Anantavrasilpa (Thailand). by the rest of the Intelecon team. The team also included Jenny Hoffmann from RiskFrontier Several individuals within IFC, infoDev, the Consulting (United Kingdom) and local research World Bank, and the Consultative Group to Assist partners in each country: Antonio Bothelo of the Poor helped create this report, providing ser- Diálogo Regional sobre la Sociedad de la Infor- vices including Trust Fund administration, proj- mación (Brazil), Ike Moweto of Research ICT ect management, project design, expert advice, Africa! (Nigeria), Harsha de Silva of LIRNEasia peer review, administration of in-country surveys, (Sri Lanka), and Deunden Nikomborirak of Thai- coordination, printing, and public relations. land Development Research Institute (Thailand). We are grateful for the insightful inputs and peer We are also extremely grateful to our partner- reviews by Hemant Baijal, Deepak Bhatia, Mar- ing m-money operators for their cooperation: Oi garete Biallas, Massimo Cirasino, Andi Dervishi, Paggo in Brazil (a new company, Paggo Soluçoes, Janine Firpo, Soren Heitmann, Eriko Ishikawa, has since been formed), eTranzact in Nigeria, Nikunj Jinsi, Samuel Kamau Nganga, Tim Kelly, xi  xii  IFC Mobile Money Study 2011: Brazil William Kerr-Smith, Yong Hyun Kwon, Samia D’Costa, Philippe Dongier, Gilles Galludec, Mat- Melhem, Harish Natarajan, John Irungu Ngahu, thew Gamser, Dianne Garama, Idawati Harson- Mark Pickens, Christine Zhen-Wei Qiang, gko, Oleh Khalayim, Sujata Lamba, Henna Lee, Wiebke Schloemer, Josef Skoldeberg, Hourn Thy, Kent E. Lupberger, Trang Nguyen, Marcia Roa, Michael Trucano, and Shinya Yoshino. Colin Shepherd, Peer Stein, Stephanie Von Frie- deburg, and Ann-Marie Webster. Mary Paden edited the text to make it very user- friendly. Nita Congress gave it a wonderful design. The project could not have been completed with- out the administrative and managerial support Arata Onoguchi, Leila Search, and Piya Baptista of Greta Bull, Catherine H. Burtonboy, Valerie IFC Mobile Money Study 2011 Project Team Abbreviations 2G second generation 3G third generation ATM automated teller machine B2B business to business BNDES Brazilian National Development Bank CGAP Consultative Group to Assist the Poor e-money electronic money e-payment electronic payment e-wallet electronic wallet FEBRABAN Brazilian Federation of Bank Associations FGV Fundação Getulio Vargas G2P government to person GDP gross domestic product GSM global system for mobile communications HHI Herfindahl-Hirschman Index IFC International Finance Corporation KYC know-your-customer m-banking mobile banking m-money mobile money m-payment mobile payment MFI microfinance institution MNO mobile network operator MSD Ministry of Social Development NFC near-field communication OSCIP Organização da Sociedade Civil de Interesse Público P2P person to person PIN personal identification number PMC BNDES Microcredit Program POS point of sale SCM Sociedade de Crédito ao Microempreendedor SIM subscriber identity module SMS short message service WAP wireless application protocol The average exchange rate for the year 2010 of 1.76 Brazilian real/1 U.S. dollar is used throughout. xiii  Summary A lthough some data suggest that Brazil ƒƒ Correspondent banks. A large network of such has a large unbanked population,1 and banks (up to 150,000) allows for efficient bill therefore potential opportunities for payment by people without bank accounts.2 mobile money (m-money), our analy- ƒƒ Consumer loans and credit. Consumer loans sis asserts that the Brazilian population is better and credits provided by retailers have grown served through a variety of formal and informal more than 30  percent in the past year, espe- means. Brazil does have a considerable demand cially among low-income groups. No bank and opportunity for credit and microcredit, espe- account is required, and regulation allows the cially among the low-income population. retailer to recover goods in the case of nonpay- However, a recent partnership may give m-money ment. and mobile payments (m-payments) better pros- ƒƒ Payroll-consigned loans. Facilitated through pects in Brazil. Tele Norte Leste, popularly known regulation aimed at financial inclusion, these as Oi (Portuguese for “hello”), the country’s larg- loans are widely popular and used throughout est telecommunications firm, has formed a part- Brazil, with more than 50,000 companies par- nership with a major bank, Banco do Brasil, and ticipating. the credit card acquiring company Cielo, which owns approximately 50  percent of Brazil’s credit The biggest demand from the population is for card point-of-sale (POS) infrastructure and has access to credit. In contrast, there is little demand relationships with merchants. Oi is now poised for remittances, either domestic or international. to capture a larger m-money market than it could Eighty-four  percent of the population is urban, previously with its subsidiary Oi Paggo, which and inbound international remittances account offered credit through mobile phones. only for 0.3  percent of gross domestic product (GDP). Currently, the unbanked population in Brazil is served through the following: 2  Correspondent banks are retail agents such as lot- tery chains, supermarkets, or drug stores that deliver 1  The Consultative Group to Assist the Poor estimates financial services outside traditional bank branches. An that 70 percent of the adult population still lacks access institution licensed by the Central Bank of Brazil may to bank accounts but admits there are no official sources partner with any legal entity to deliver a regulated but to verify the number (CGAP 2010b). The Financial wide array of financial services, including loan applica- Access Initiative (FAI 2009) states that 43  percent of tions, credit and personal data analysis, loan collection, the adults in Brazil use formal or semiformal financial receipt of account opening applications, deposits/with- services (i.e., banks or microfinance institutions). drawals, and bill payments. 1  2  IFC Mobile Money Study 2011: Brazil Credit card and debit card penetration is high, the mobile “credit card” be widely accepted by with 1.65 debit cards per deposit account, and merchants, and that is not the case at this time. 1.10 credit cards per deposit account (with a growth of 117 percent from 2003 to 2008 for the Thus, there is no opportunity for any MNO to act latter). Credit and debit cards are supported by alone; it needs to partner with banks and/or pay- high automated teller machine (ATM) and POS ment providers. If an MNO can bring new cus- device penetration in the country. In 2007, Brazil tomers to the payment provider (e.g., through its had 832 ATM terminals per million inhabitants, POS terminals and network), it would be attrac- on par with Germany (831), France (821), Italy tive for both parties. (817), and Switzerland (778), but behind the Banks may have an interest in acquiring new cus- United Kingdom (1,040) and Japan (1,121). tomers with a mobile stored value account, but Brazil has a massive conditional cash transfer they ultimately would want to move customers to scheme for the poor—Bolsa Familia. This pro- a bank account, as well as to control the brand and gram benefits 12.5 million families every month loyalty of the clients. using a card-based system. Financial inclusion The credit market is the most promising area for efforts by the government allow for a “simplified m-money to develop services and applications in account”; more than 10  million such accounts Brazil. Both high-end clients and lower-income exist, but only 5.5 million are active. unbanked clients are interested in credit, rather The banking sector is competitive and efficient. than savings, products (table S.1). Because the country is served decently by both Brazil’s banks seem challenged between serving formal and informal means, opportunities for the high-end banked clients with advanced tech- m-money are limited. The main value-added nology—such as NFC for payments (e.g., Visa propositions m-money could potentially provide payWave) that provides convenience and speed— in such a market are as follows: and addressing the lower-income clients and the ƒƒ The ability for existing bank customers to make unbanked population, who need tailored credit transactions while on the move and to make offerings and other financial services. remote purchases or payments; otherwise, the Oi Paggo, the leading m-money service provider, current use of payment cards is faster and more started as a credit card business, but later replaced convenient until near-field communication the actual credit card with a mobile phone that (NFC) is universal could communicate with another mobile phone ƒƒ A stored value account for unbanked custom- that acted as the POS device for merchants. The ers, which would require (1) a wide cash-in/ credit card business is attractive in Brazil because cash-out agent network (which only the banks there is a strong, unmet demand for credit, espe- have currently), and (2) a large payment accep- cially among the middle class (called the “C-class”) tance network where people can pay with their and because there are high credit spreads from m-money (which only the payment card pro- 5–15 percent on monthly balances. viders currently have) In developing its m-money business, Oi Pag- ƒƒ Extensive (micro-) credit to unbanked custom- go’s main challenge was to reach economies of ers, who cannot be reached by the banks or scale and to increase acceptance of Oi Paggo credit card companies, but might be reached as a payment instrument. In 2010, Banco do through the relationship that a mobile network Brasil and Cielo, Brazil’s leading card acquirer, operator (MNO) has with its customers (this signed deals with Oi Paggo’s parent company, is similar to the service offered by Oi Paggo, a Tele Norte Leste, (popularly known as Oi), 100 percent subsidiary of the mobile operator the country’s largest telecommunications firm. Oi); however, this service would require that Banco do Brasil signed a deal “with the purpose  Summary 3  Table S.1  Mobile Money Opportunities in Brazil Potential Potential transactions/ market Assessment Description Challenges and obstacles month Bill payments ƒƒ Little opportunity for m-money, as ƒƒ Would require quick response code 164,311,579 (utilities) Brazil has a fairly efficient bill payment technology (instead of current bar system controlled by banks code) for mobile phones to read bill ƒƒ Survey shows majority uses the information and stored value mobile  correspondent bank system to pay bills accounts to be an opportunity for people without bank accounts ƒƒ People with bank accounts can easily use direct debit for convenient payment ƒƒ Requires major investment and effort, unlikely to be sufficient margin Person-to- ƒƒ Between 18% and 27% of respondents ƒƒ Only 19% of the population is rural, 12,020,263 person (P2P) stated they deliver funds personally and there is no strong migration transfers ƒƒ M-money P2P could be convenient between rural and urban areas  alternative ƒƒ Most transfers take place intracity ƒƒ Financial sector has a wide network of agents and would create substantial competition Government- ƒƒ No clear value-added proposition ƒƒ Mobile operator cannot compete with 16,666,667 to-person at this point, but possible future existing correspondent banking agent (G2P) opportunities network of the banks for cash-out points payments ƒƒ Card solution in existence, controlled by  banks, including agent network ƒƒ Cost reduction is possible through elimination of cards and use of mobile phones to store money; cooperation between bank and mobile operator is required Payroll ƒƒ Relatively large informal sector ƒƒ Interoperability needed among mobile 48,081,050 (informal ƒƒ There may be an opportunity in operators sector) payments from banked to unbanked ƒƒ Partnership with banks needed for  (e.g., domestic staff) cash-out points ƒƒ Solution only needed for workers without bank accounts or seasonal workers Public ƒƒ Large-scale opportunity with clear value ƒƒ Needs NFC adoption to succeed, 1,421,900,000 transport proposition to replace existing system requiring investment ƒƒ Convenience of noncash payment ƒƒ Strong card industry and card  would be attractive penetration ƒƒ Possible that credit card companies and/ or banks may come up with a (prepaid) card rather than mobile solution Business- ƒƒ Brazil, as a major producer and ƒƒ Not clear how many of the small — to-business exporter of certain food products (e.g., businesses, farmers and food producers,  (B2B) coffee, poultry, beef), has numerous and workers are unbanked and require payments large companies working with many an m-payment option farmers and producers ƒƒ Strong retail and distribution network 4  IFC Mobile Money Study 2011: Brazil Potential Potential transactions/ market Assessment Description Challenges and obstacles month International ƒƒ International remittances flowing ƒƒ Inbound international remittances in — remittances into Brazil were US$5 billion in 2009, Brazil dropped 40% in the past three mainly from Japan, Spain, and the years and are only 0.3% of GDP;  United States outbound remittances are only a fifth of that ƒƒ Low demand: largely urban population can access Western Union or similar services Credit and ƒƒ Credit and microcredit is the largest ƒƒ MNOs must create partnerships with — microfinance growing market with the strongest banks; Oi and Banco do Brasil recently  demand from lower-income clients created a partnership that looks ƒƒ Presents an opportunity for m-money if promising. the right partnerships can be created ƒƒ There are very few large-scale microfinance institutions Savings ƒƒ Opportunity unknown ƒƒ Out of 10 million simplified accounts, — only 5.5 million are active  ƒƒ Explanation could be either (1) interest on savings might be low or nonexistent, or (2) lack of interest or capability for savings Source: IFC Mobile Money Study 2011. Note:  = significant and unrealized opportunity for m-money: many of the preconditions for m-money exist, such as demand, supportive regulation, and an identifiable group of customers;  = potential opportunity but there are substantial challenges;  = unlikely to be any m-money opportunity due to lack of economies of scale or other constraints; — = not available. of establishing a business partnership to issue co- Paggo Acquirer. Paggo Soluçoe plans to conduct branded credit cards and pre-paid cards,” as well activities in connection with the capture, trans- as working on increased m-payments with Oi’s mission, processing, and payment of business client base. Banco do Brasil, which jointly owns a transactions using m-payment technology and controlling stake in Cielo with the private sector accredit current and new stores to its network of bank Bradesco, has taken a 50  percent stake in transactions originating in mobile phone devices a new company to be known as Paggo Soluçoe; through the existing network of Cielo and Paggo the other 50 percent is held by an Oi subsidiary, Acquirer all over Brazil. Introduction 1 A lthough a number of m-money busi- ƒƒ Which countries are the most likely to have a nesses have emerged around the world, mass market for m-money, and how can they few have reached significant scale. Over- be identified? all, m-money uptake is limited when ƒƒ What business strategies and partnership models contrasted with its apparent promises of reaching can best exploit m-money opportunities? the unbanked and underserved, of servicing exist- ing banking clients, and of being a means for a ƒƒ Where are the best investment opportunities? cashless society. This report provides detailed information regard- ing the five main topics as they relate to Brazil— Study Focus business models, money flows/demand, potential This study examines the following in more detail: user perceptions and behavior, regulation, and agent networks. ƒƒ Existing major money flows and the critical mass of low-value, high-volume payment trans- actions and whether m-money can be used for Socioeconomic Country them (i.e., potential demand) Context ƒƒ Regulatory environment and major obstacles Poverty and Urbanization for m-money uptake Fifty million Brazilians, representing 26 percent of ƒƒ Business models of partnering institutions the population, live below the poverty line. Brazil ƒƒ Payment behavior of users and nonusers is highly urbanized with 84 percent of its inhab- (banked and unbanked), in particular where itants living in urban centers. Not surprisingly, they receive funds and how they use money, approximately 50 percent of the rural population including alternative means is considered poor. ƒƒ Existing and potential agents’ networks, their requirements to run m-money as a viable busi- Regional Differences ness, and their training needs. Because of its large geographical size, Brazil has a diverse range of socioeconomic regions, all of The key analytical questions guiding the study which differ in population, economic drivers and follow: industries, agricultural activities, and service sec- ƒƒ How can m-money adoption be accelerated? tors. Table 1.1 shows that the north and northeast 5  6  IFC Mobile Money Study 2011: Brazil Table 1.1  Distribution of Household Monthly Income Levels in Brazil and Its Major Regions, 2008 (%) Income levela Brazil North Northeast Southeast South Midwest No income 1.3 1.5 1.4 1.2 1.0 1.6 <1 mimum wage 12.2 13.8 23.8 7.3 7.1 9.5 1–2 minimum wages 21.5 26.5 29.7 17.2 17.6 21.1 2–3 minimum wages 17.0 19.1 17.4 16.6 16.5 17.4 3–5 minimum wages 20.1 18.8 13.6 22.5 24.4 20.6 5–10 minimum wages 15.8 12.3 7.7 19.5 20.3 15.5 10–20 minimum wages 6.5 4.5 3.1 8.1 8.1 7.7 >20 minimum wages 2.7 1.4 1.5 3.3 3.0 4.4 Source: Instituto Brasileiro de Geografia e Estatística 2008. a. The Brazilian national minimum wage is adjusted annually (e.g., in 2009, it was R$465 or US$264 a month). The data here categorize household income levels by multiples of the minimum wage. regions have a higher proportion of poorer fami- lies—a point of interest since any m-money prop- Table 1.2  Monthly Income osition would need to be regionally tailored and R$ income US$ income % of population targeted. Class (2007) (2007 rate) (2005) A1 14,250 7,357 0.9 Rise of the Middle Class A2 7,557 3,902 4.1 Another important contextual factor is the rise of B1 3,994 2,062 8.9 the middle class in Brazil, which mirrors the coun- try’s economic growth. According to the Funda- B2 2,256 1,165 15.7 ção Getulio Vargas (FGV),1 the middle class C1 1,318 680 20.7 (“C-class”) increased from 42 percent of the pop- C2 861 445 21.8 ulation in 2004 to 52 percent in 2008. Typically, the C-class is employed in the formal economy, D 573 296 25.4 which facilitates access to credit with which they E 329 170 2.6 can buy their first car or home and have their first Source: Associação Brasileira de Empresas de Pesquisa Web site 2007, credit card. Table  1.2 shows that C-class people accessed May 2010. had a monthly income of US$445–US$680 per capita in 2007. As the country develops, banks are likely to have an interest in acquiring customers from lower- 1  FGV is a private foundation offering education and training (undergraduate, master’s, doctoral, and applied income classes who will become more affluent work), research, and consultancy. over time. Demand Perspective 2 T his chapter provides a demand perspective for m-money, both qualitatively and quan- Table 2.1  Potential Mobile Money Market Segments titatively. Figure 2.1 estimates total monthly volumes (not value) of transactions in key Market segments that could offer m-money opportuni- segment Description ties. However, m-money has to compete both with Bill In developing economies, it is common to pay traditional payment methods and other electronic payments bills by queuing outside the utility company. money (e-money) options and is therefore unlikely (utilities) Although this may be a niche market, the value to be able to capture all of this potential. proposition is to provide a convenient, safe, and fast mechanism to pay bills. Table  2.1 provides a qualitative description of P2P The success of Kenya’s M-PESA indicates that these market segments in terms of their opportu- transfers there is a large unmet demand in transferring nities and challenges. Based on both desk research money between people. and field visits, the potential markets for m-money G2P Governments make regular payments to at least listed in the table were investigated. Where appro- payments 170 million poor people worldwide.a The value proposition is to provide a more cost-effective priate and possible, additional potential applica- and time-saving service to citizens. tions for m-money were also investigated. Payroll This segment might overlap with the P2P (informal market, but is a more specific opportunity for an sector) m-money application allowing small businesses Figure 2.1  Potential Monthly Transactions in in the informal sector to pay their staff. Key Mobile Money Market Segments in Brazil Public The success of NFC technology in Japan indicates Millions transport that there is potentially a massive market, 1,600 1,421,900,000 particularly for NFC-enabled phones. 1,200 B2B B2B payments in rural areas beyond the reach of payments banks are difficult and handled mainly by cash or 800 check. M-money could provide mobile payment capabilities at each stage along the value chain. 400 164,311,579 Retail Cash is less secure than e-money. Consumers may 0 12,020,263 16,666,667 48,081,050 payments find paying with an NFC-enabled card or phone Bill P2P G2P Payroll Public more secure and more convenient than using cash. payments transfers payments (informal transport (utilities) sector) Source: IFC Mobile Money Study 2011. Source: IFC Mobile Money Study 2011. a. Pickens, Porteous, and Rotman 2009. 7  8  IFC Mobile Money Study 2011: Brazil Of the seven markets described, data were avail- companies are mostly private with a few public able for only four, although a qualitative investi- (both state and federal), mainly in the north and gation is shown for all seven, as well as additional some in the northeast regions. A notable exception market segments. is Cemig, a Minas Gerais state electricity distribu- tion company (with some equity held by private Bill Payments (Utilities) investors); it recently gained control of Light, the private distribution company in Rio de Janeiro. Because past inflation was so rapid, payments lost value while they were in the mail. Thus, the gov- Light, serving Rio de Janeiro as well as a few bor- ernment authorized banks to collect taxes, util- dering municipalities, has 3.7  million residen- ity bills, and other bills (boletos) at banks, ATMs, tial clients. Nonpayment for residential clients or correspondent banks. Banks also issue a large (households, small shops, and communities) is 3– number of boletos on behalf of utility and other 5  percent. Only 50  percent of residential clients companies. Thus, banks are largely both the issuer pay their electricity bill by the due date. There- and collector of bills in Brazil. fore, the main benefit of m-payment would be the facilitation of timely bill payment (though direct An example of bill mass transactions is Net Ser- debit might be even better). vicos (Net), a cable TV, Internet, and fixed tele- phone service provider. It has 3.7  million sub- It is unclear whether a business case for m-pay- scribers and sends out 4 million bills every month ment of bills could be made for banks, as they (some customers have more than one service) are currently being paid approximately R$0.90– resulting in 48 million bills per year. R$1.20 (US$0.51–US$0.68) for accepting bill payments by the payee. Thus, along with the fee The existing boleto payment system is fairly effi- from companies to issue and process boletos, rev- cient. Customers can pay their bills through direct enue from each bill payment is currently approx- debit, the Internet (by entering a lengthy bar imately R$2 (about US$1). Reducing their own code), ATMs, or direct payment at branches and revenue is clearly not in the interest of the banks, correspondent banks. Eighty-eight percent of the though one bank could try to take away market use of correspondent banks in cities is related to share from others by offering lower costs. Mobile bill payments. operators (or a third party) may have a potential business case in capturing part of the bill pay- According to Net, 53  percent of payments are ment market. As an illustration, Net’s annual bill made by direct debit, at a cost to Net of R$0.50 payment requirements could represent potential (US$0.28) each; and 47 percent are made through revenue of approximately R$96  million (about the boleto system using the following means: US$55 million).1 ƒƒ 6  percent through Internet (entering the Utilities and other companies may have an inter- bar code) at a cost of approximately R$0.70 est in reducing the costs of bill payment, but this (US$0.40) alone is not a powerful driver; for example, Net’s ƒƒ 20  percent through direct payment at cor- typical bill is above R$100 (US$57), so an extra respondent banks at a cost of approximately R$2 (US$1.14) for bill payment processing is not R$0.90 (US$0.51) significant. Both mobile operators and the utilities ƒƒ 74  percent through other banking channels face the powerful banks, which seem to control (mostly ATMs) which also costs about R$0.90 the billing system in Brazil. (US$0.51). Brazil has approximately 52 electricity distribu- 1  Forty-eight  million bills per year times R$2 tion companies. Typically, these companies cover (US$1.14), at June 2010 exchange rate. These figures several municipalities and, in few cases, states. The are based on assumptions. 2. Demand Perspectives  9  Furthermore, bill m-payment requires technologi- Government-to-Person cal changes; the current boleto includes bar code Payments technology, so a user would have to enter more than 30 digits into a mobile phone to pay a bill. The well-known Bolsa Familia program of Brazil, For mobile phones to be used for bill payments, a which aggregated several programs for greater effi- switch to a two-dimensional quick response code ciency, distributes R$95 (US$54) every month to would be required. 12.5  million families. The criteria for eligibility are as follows: Person-to-Person Transfers ƒƒ Less than R$140 (about US$80) in income per Brazil does not appear to present a strong market month per person in the family opportunity for mobile person-to-person (P2P) ƒƒ Children must have a school attendance rate of transfer. Domestic migration seems to have 85 percent or more decreased substantially over the past few decades, ƒƒ Pregnant women must complete the prescribed and 84  percent of the Brazilian population is urban. Neither desk research nor interviews with regular health checks key informants indicated a major opportunity ƒƒ Children younger than seven years old must for P2P transfers in Brazil. That is not to say that receive the prescribed immunizations from the if the service were provided there would be no health ministry. uptake. P2P in Kenya is, to a significant extent, between rural and urban people, and has the ben- The Ministry of Social Development (MSD) efit of cost and time savings. In Brazil the main pays Caixa Econômica Federal (Caixa) R$1.20 attraction would be convenience, with the sender (US$0.68) per payment each month, result- and receiver likely to be in the same city. ing in annual revenue of R$180  million (about US$102 million) per year for Caixa. However, the If the recipient has a bank account, there are effec- MSD and Caixa are in the process of negotiating a tive, low-cost means to transfer money within the new price. The administrative costs of the program country through the banks and correspondent are less than 5 percent of the benefit amount, and agents, even if the sender has no bank account. the payment channels represent 3 percent of the Many banks offer m-money transfers to their cli- welfare amount (i.e., they are the costliest part). ents, including money transfer to different banks. However, mobile banking (m-banking) use is still However, the MSD’s main problem is not the cost very small, with one of the major banks report- of the program, but rather its difficulties in reach- ing 400,000 customers using it, with only three to ing 300 municipalities (out of more than 5,000 in four activities per month at the end of 2009. the country) that either have no established pay- ment channel from Caixa or rely on correspon- The two most used m-banking services are moving dent banks that have a high turnover and fre- money within a bank (e.g., between accounts, to quently go out of business. Some recipients spend investments, or to pay a credit card) and trans- R$10 (US$5.68) on travel to a place where they ferring money to other banks. M-banking ser- can cash out their benefits, losing 11  percent of vices, including money transfer, are offered free of their welfare payment. The MSD wants to make charge, as there is no major cost to the bank and it easier for them to cash out benefits. However, the client pays the communications costs. There is the MSD’s analysis shows that mobile operators a R$2.50 (US$1.42) monthly fee for the mobile have little coverage in these communities, mean- communications/notification service to cover the ing m-payment will not be the solution until cov- cost of sending a text message to the client. The erage improves. main objectives of m-banking are simply to offer a different access channel for clients, who are often Nevertheless, with US$300,000 funding from the also Internet banking users. Bill & Melinda Gates Foundation, the MSD has 10  IFC Mobile Money Study 2011: Brazil planned a pilot with Oi Paggo, to be executed by Brazil has major government-to-person (G2P) Caixa. The welfare clients of Bolsa Familia will money flows, which are mostly transferred to plas- receive a text message that asks if they want their tic “citizen cards” (i.e., Bolsa Famila). Recipients monthly R$95 (US$54) paid normally (on their cannot add value on the card, but the card acts Bolsa card) or transferred to a special prepaid as a debit card. They must present the card and “e-wallet” from Oi Paggo. withdraw the entire amount. There is certainly an opportunity in this sector if a mobile operator In conclusion, cost reduction is not a major driver can link into existing correspondent banks, add for the MSD to investigate m-payment solutions additional agents, and convince the MSD of the for the Bolsa Familia program at this point. The benefits of allowing stored-value e-wallets for the program is, in general, open to mobile solutions, recipients and additional financial services (e.g., and plans to investigate and invest in alternative P2P transfers). channels, as well as a greater diversity of delivery institutions (outside of banks). However, at the moment m-payment cannot solve its most press- Public Transport ing problem. Rather than becoming a driver for Public transport presents a sizable market oppor- the development of a mobile solution, the MSD tunity for m-payment. In 2008, 16.8 billion trips will wait to see how Bolsa families can benefit were taken in Brazil using public transport, which is from expected partnerships between Caixa, other equivalent to 0.47 trips per day per inhabitant. Use banks, and MNOs. of public transport varies between larger and smaller cities, with people in larger cities using it more. The MSD planned research on financial education and behavior in July 2010 among a 7,000-family Of all trips taken, 29  percent were via public sample of Bolsa Familia recipients to measure transport (figure 2.2)—21.2 percent by municipal levels of financial education and financial access, bus, 4.7 percent by metropolitan bus, and 3.5 per- as well as to improve the simplified account, cent by rail. The percentage of public transport develop additional products, and understand the use is higher (36 percent) in cities with more than market. Financial education is seen as crucial to 1 million inhabitants. The average trip length in raising the financial literacy level of the poor and larger cities was16 kilometers, and the average trip unbanked, as well as to increasing the adoption of time was 42 minutes. The typical trip cost was financial services. R$2 (US$1.14) (ANPT 2009). Brazil had 75,600 municipal buses, 24,100 metropolitan buses, and The Bolsa Familia payments amount to 150 mil- 2,600 metrorail vehicles in 2008. lion transfers per year. But Caixa manages sev- eral government transfer programs, with roughly 200 million payments per year, with an approxi- Figure 2.2  Shares of Transportation Modes mate value of R$40 billion (US$22.7 billion). In addition to Bolsa Familia, these include By foot ƒƒ unemployment insurance payments (largest in 39% value), ƒƒ special salary raises (abono salarial) and social Bicycle 3% Public integration income, transport Motorbike 3% 29% ƒƒ social security, and Car ƒƒ pension fund payments. 27% There are several others, ranging from just 500 beneficiaries (e.g., culture grants) up to Bolsa Source: ANPT 2009. Familia, with the largest number of beneficiaries. 2. Demand Perspectives  11  Brazil has more than 180,000 taxis, with São payments using m-money. Many employees Paulo accounting for the largest number: 33,000 receive lunch money in the form of vouchers. (table 2.2). Taxi companies have expressed interest Also mentioned was the need for wealthier (A- in wireless POS solutions. and B-class) families to pay domestic staff, such as nannies, housemaids, and security guards, who Table 2.2  Taxi Distribution by City Population often lack bank accounts and must be paid in Size cash. Practically all domestic workers have mobile City population size Number of taxis phones, so transferring money to their phones would be an attractive alternative. <1 million 110,895 500,000–1 million 18,232 As a major producer and exporter of certain food products (e.g., coffee, poultry, beef ), Brazil also 250,000–499,999 21,677 has a strong distribution network. Illustrations of 100,000–249,999 18,604 potential B2B or business-to-employee opportu- 60,000–99,999 10,691 nities in this industry follow: Total 180,099 ƒƒ Coffee provides a livelihood for between Source: ANPT 2009. 230,000 and 300,000 farmers and employs a further 3 million people directly in the coffee industry (Oxfam 2002). Low-value ticket transactions like public trans- port, parking, taxis, and road tolls are seen by ƒƒ In 2005, there were 982,604 workers some Brazilian players as ripe for noncash solu- employed in sugarcane cultivation and indus- tions, and some pilots are under way (e.g., Visa trialization, including 414,668 workers in the payWave). The city of São Paulo has bid out a con- sugarcane fields, 439,573 workers in the sugar tract to develop a noncash payment solution for mills, and 128,363 workers in the ethanol dis- its buses and metrorails to be implemented within tilleries. two years. ƒƒ The cattle industry as a whole generates 7.5 mil- Public transport presents a sizable market oppor- lion jobs in Brazil. tunity for m-money payment. About 16.8 billion ƒƒ The state of São Paulo is responsible for trips per year at R$2 (US$1.14) each—assuming 98  percent of Brazil’s production of orange 1 percent of the fee for an m-payment option— juice; the industry employs 400,000 people represents a total market of R$336 million (about US$191  million) annually. However, it would there and has 10 processing plants and 19,000 require massive investment in NFC-enabled read- groves. ers as well as public adoption of NFC-enabled ƒƒ AmBev (owned by AB InBev—the world’s phones. Transport users, who are among the less largest brewer) employs workers in 13 brewer- affluent in their communities, may be slow to ies and has 1  million points of sale; there are adopt the new phones. It is more likely that card two other brewers, one serving 600,000 retail- and POS device companies will come up with a ers, the other 400,000. card-based solution. ƒƒ Souza Cruz, a subsidiary of BAT, is the larg- est tobacco company in Brazil. Souza Cruz Business-to-Business or has 7,000 direct employees and 3,000 seasonal Business-to-Employees workers (safreiros) hired during the harvest to (Payroll) Transfers purchase and process the tobacco. The com- There may be a small niche opportunity for busi- pany buys the tobacco from farmers: about ness-to-business (B2B) and business-to-employee 40,000 integrated producers receive seeds, 12  IFC Mobile Money Study 2011: Brazil inputs, technical assistance, and guarantee of Credit and Microfinance purchase of their crop. Credit and microcredit is the largest growing ƒƒ Brasil Foods, which operates 41 meat process- market, with the strongest demand from lower- ing plants, 16 milk/dairy products and dessert income clients. This market would present an processing plants, two margarine processing opportunity for m-money if the right partnerships plants, and one soybean processing plant, has can be created. approximately 105,000 employees. ƒƒ JBS-Friboi, another food company, has more Credit and Payroll Loans than 23 plants in nine Brazilian states and Consumer loans and credit have grown steadily— more than 16,900 employees in Brazil. The by 28 percent a year from 2006 to 2008—due to clients of JBS in Brazil are essentially sell- reforms that include a law that allows the lender ers, restaurants, and leather tanning units. to remain the owner of the asset acquired (such as JBS-Friboi’s current client portfolio includes a car or apartment) until it is fully paid off. Prior more than 6,000 companies in the domestic to this legislation, lengthy legal procedures had market. In 2008, 11,240 clients were served to be employed to recover the property in case of on the domestic market. default. After the new law was passed, the number of credit cards increased from 53.5  million in An interesting example for a wholesale/distribu- 2004 to 137.8  million in 2008, even though tion business and its relations to its customers is credit is expensive (The Economist 2009). Bra- Grupo Martin (GMartins). GMartins is the larg- zil’s leading consumer credit rating agency, Serasa est wholesaler/distributor in Latin America, with Experian, reported in March 2010 that consumer more than 20,000 customers (retailers) in Brazil. credit demand had risen 32.5 percent since March GMartins wholesales foods, pharmaceuticals, con- 2009; the lowest-income group (those earning less struction materials, white goods, and electronics. than US$275 a month) showed a slightly higher GMartins is located in Minas Gerais, a central rise in demand of 32.9 percent. location for distribution in Brazil. Issuing credit cards to unbanked customers, or for In 1990, GMartins created its own bank, Tri- banks to issue credit cards to noncustomers, is a banco. Tribanco provides financing and bank- fairly common practice in Brazil. ing services to GMartins retail customers, such as receivables discounting, equipment purchase Payroll loans are also very popular in Brazil, as financing, investment alternatives, and even another means of credit. As part of the govern- credit cards to their clients. IFC (International ment’s financial inclusion strategy, a regulation Finance Corporation) invested in Tribanco in was issued enabling banks to make payroll-con- 2005. Tribanco follows GMartins to the most signed loans. Data from the Central Bank of Brazil remote and neglected areas of Brazil, where show the balance of payroll loans was R$75  bil- many small shops and consumers have virtually lion (about US$42.6 billion) in February 2010, up no access to financial services. The credit cards threefold from R$25  billion (about US$14.2  bil- provided by Tribanco are often people’s first lion) in February 2007. More than 2 million con- credit card. IFC financing is designed to support tracts were added per month. More than 56,000 Tribanco as a pioneer microfinance operator in a companies offer payroll loans with an average value large, underserved market. of R$3,665 (US$2,083) at an interest rate that only dipped below 20 percent in 2010. Tribanco sales staff in Rio de Janeiro said no obvi- ous benefit of m-money to its clients was appar- Microfinance ent. However, a proper assessment could help to ascertain any opportunities with GMartins and/ The Brazilian National Development Bank or Tribanco. (BNDES) manages the Brazilian Program for 2. Demand Perspectives  13  Guided and Productive Microcredit, created in 2005. The program defines singular credit cooper- Figure 2.3  PMC Annual Disbursement atives, governmental agencies, microfinance credit Million R$ societies, and public interest civil societies. 35 US$18.47 30 The Sociedade de Crédito ao Microempreende- 25 US$13.47 dor (SCM) and Organização da Sociedade Civil US$11.14 20 de Interesse Público (OSCIP) are the institutions US$9.38 15 for productive and guided microcredit. Out of 10 1,934 eligible microcredit institutions (including 5 US$1.42 all commercial banks), 308 (16 percent) are regis- 0 tered with the Program for Guided and Produc- 2005 2006 2007 2008 2009 tive Microcredit, and 152 (49  percent) are sup- Source: BNDES 2010. ported by the BNDES microcredit program. BNDES lends to the above-mentioned microcredit ƒƒ 89  percent have loans of less than R$3,000 institutions, providing affordable funds and aiming (US$1,705) to improve the institutional development of non- governmental microfinance institutions (MFIs) ƒƒ 92 percent are not registered (i.e., they are in according to financial system standards. Rules for the informal sector) microcredit institutions include the following: ƒƒ 64 percent are women ƒƒ Maximum interest rate: 4 percent per month ƒƒ 52 percent are low income (income equivalent plus an initial tax of up to 3 percent of one to three times the minimum wage). ƒƒ Maximum amount: R$15,000 (US$8,526) The number of capable MFIs is very small in Brazil. ƒƒ Maximum annual revenue: R$240,000 Table 2.3 shows the main players and number of (US$136,424). active borrowers; this information excludes credit cooperatives, which in some cases are professional The main challenge to the MFI sector in Brazil associations. is that microfinance has a narrow regulatory defi- nition and stringent requirements limiting inter- The number of active borrowers is consistent est rates and specifying that credit must be used with the estimate given by BNDES, which esti- for productive purposes and not for consumption. mated 753,000 active clients at the end of 2009. Credit given at higher interest rates is not consid- ered microfinance. Thus, vast resources for micro- finance are not used. Since 2003, Brazilian banks Table 2.3  Main Microfinance Institutions by must allocate 2 percent of their demand deposits Number of Borrowers for microfinance, but apparently close to 50 per- MFI Number of active borrowers cent of these funds remain unused. CrediAmigo 500,000 plus BNDES’s current portfolio of loans is R$80 mil- Banco Popular do Brasil 140,000 lion (about US$45.5  million), with R$250  mil- lion (about US$142  million)over three years. Real Microcredito 90,000 plus Figure 2.3 shows the disbursal of funds since the Ceapi 22,000 inception of the BNDES Microcredit Program Andi 20,000 (PMC). Total ~780,000 Active borrowers from PMC can be categorized as Source: Brazilian IFC office, March 2010. follows (BNDES 2010): 14  IFC Mobile Money Study 2011: Brazil Considering the size of Brazil’s population, this is Savings a very small number. Figure  2.4 shows Brazil’s household net savings In contrast, small businesses account for almost rate. The Brazilian government’s strategic objective half of the country’s formal employment. The is financial inclusion. In 2004, Brazil introduced, World Bank reports that nearly 60 million people as part of its financial inclusion policies, a simpli- receive their primary income from one of Brazil’s fied bank account (conta simplificada) with both 4.1 million formal small businesses. An additional simplified current and savings accounts. Central 14  million informal small businesses contribute Bank data from February 2010 show that while to the income of Brazil’s poor. To continue to there are slightly more than 10 million simplified fuel Brazil’s economic growth, these microenter- current accounts, only 5.5  million (55  percent) prises need access to credit; however, Brazil has a are considered active. There are only 192,281 sim- relatively low microfinance penetration rate com- plified savings accounts, with 16,758 (9 percent) pared with its neighbors. considered active. It appears that account holders are either not interested in saving or not able to Overall, the credit market is very attractive for save, or there is a problem with the design of this m-money, and the only m-money provider in simplified account. There is no information on Brazil, Oi Paggo, offers a credit service. The target whether interest is paid on either account, which markets are both high-end credit card custom- could be an issue. ers and lower-income people, who have exhibited a strong demand for credit. However, these two groups must be addressed through different prod- Figure 2.4  Annual Household Net Savings Rate ucts and strategies. Rate (%) Some banks and mobile operators are still strug- 10 gling to form a business model and partnerships, 8 as well as to define product offerings for these markets; however, they are keeping their cards 6 close to the chest while developing their strategies. 4 Nevertheless, most stated that they would launch 2 more products in these areas soon. 0 2000 2001 2002 2003 2004 2005 International Remittances Source: OECD, http://www.eyestat.com/en/Household-Net-Saving-Rate/ Brazil/graph.html. International remittances flowing into Brazil were US$5  billion in 2009, mainly from Japan, Note: Data were not available for 2004. Spain, and the United States. This is equivalent to 0.3 percent of national GDP, a low figure com- The rules for simplified accounts are as follows pared with countries with a high international (CGAP 2010b): remittance market (e.g., in the Philippines, a poorer country, incoming remittances amounted ƒƒ Only persons with no other accounts can open to US$16.4  billion in 2008). Outbound remit- them. tances were US$1.2  billion. Inbound interna- tional remittances in Brazil dropped 40 percent in ƒƒ The maximum balance is R$1,000 (US$568) the past three years (Western Union 2010). Thus, (unless there is also a microcredit account). remittances do not seem a major opportunity for ƒƒ Banks cannot charge maintenance fees for the m-money in Brazil. first 12 transactions per month. 2. Demand Perspectives  15  Thus, banks depend on income from interest on the MSD and Caixa planned to have 4  million the float. Caixa suggests that the maximum bal- simplified accounts among Bolsa Familia recipi- ance be revised upwards to R$3,000 (US$1,705). ents by the end of 2010. Caixa has the lion’s share (7 million) of the sim- Caixa is still studying whether the low-income plified accounts. Two  million are held by Bolsa sector (e.g., Bolsa Familia recipients) is profit- Famila recipients. The MSD negotiated with Caixa able. Caixa feels it needs to change the behavior to offer simplified accounts, starting with a pilot of low-income customers because they typically in 2008. The MSD’s initial objective was to reduce withdraw all of their cash, rather than leaving the administrative costs of the Bolsa Familia pro- money in the account as savings (which makes it gram by getting accounts for recipients. Although unprofitable for Caixa because there is no inter- the MSD pays Caixa the same amount whether est on the float). Future initiatives, both by Caixa it goes into a simplified account or into a prepaid and the MSD, are therefore focused on financial Bolsa card, there might be cost reductions in the education programs and studies to understand the future. The other MSD objective was to promote financial behavior of low-income families in order financial inclusion for the Bolsa Famila recipients. to offer better products. An account makes it easier to offer them addi- tional services, such as microcredit, automatic Although there do not appear to be any immedi- debit, and transfers. ate opportunities for m-money in savings prod- ucts, the government’s focus on financial inclu- The MSD and Caixa have an education and sion, the planned expansion and improvements awareness campaign for simplified accounts; they of the simplified accounts (current and savings), distribute pamphlets and folders at correspondent planned studies to understand savings behavior banks, and Caixa advertises the simplified account among low-income families, and planned finan- on television. The simplified account uptake was cial educational campaigns, may bode well for fast initially, but has slowed down. Nevertheless, opportunities in the future. 3 Parameters of the Mobile Money Ecosystem T he potential m-money market in Brazil was analyzed using several parameters Figure 3.1  Brazil’s Mobile Money Market in the Porteous Regulatory Environment Model that could be incentives or barriers. These parameters were identified through a lit- erature review and refined during the field visits. High Table 3.1 (next page) provides an overview of the 2 1 parameters selected, and the following sections Low certainty; High certainty; give an analysis of relevant parameters in Brazil. high openness high openness OPENNESS Enabling Regulation There is certainty in Brazil’s m-money market, but 4 3 no openness, at least for players other than banks Low certainty; High certainty; (figure 3.1). M-payment regulation is planned but low openness low openness not expected before 2011. As a civil code jurisdic- Brazil tion, it has low openness for new entrants. Nev- ertheless, banks enjoy a high degree of certainty Low because they have a well-developed relationship Low CERTAINTY High with the Central Bank of Brazil and respond to Source: IFC Mobile Money Study 2011, based on Porteous 2006. concerns of the Central Bank with a cooperative and self-regulatory approach. accounts—there are currently 5.5  million active Know-Your-Customer Regulations ones1—are unprofitable for banks and most are supplied by the state-owned banks Caixa and Since 2004, the Central Bank has permit- Banco Popular do Brasil. ted simplified bank accounts to persons having no other bank accounts. These accounts have a However, the simplified accounts do have a more maximum balance of R$1,000 (US$568) for a relaxed know-your-customer (KYC) require- normal account and R$3,000 (US$1,705) for a ment than regular checking accounts. Opening a client with a microcredit account. Banks cannot charge for the first 12 transactions per month, 1  Central Bank of Brazil, Microcredit Statistics for Feb- there is no maintenance fee, and the microcredit ruary 2010 (http://www.bcb.gov.br/?MICROFIN; business is also limited. As a consequence, these accessed June 16, 2011). 16  3. Parameters of the Mobile Money Ecosystem  17  Table 3.1  Parameters Affecting the Success of Mobile Money Services Category Parameters Socioeconomic Population GDP/capita Geographic area Remittance flow context Poverty GDP by region Urbanization; rural Gini coefficienta population Regulation Clear and risk-based Know-your-customer Agent regulation ID system regulatory framework regulation Interoperability Pricing restrictions on M-money license Bank outsourcing requirements accounts requirements Mandatory services banks Regulations on new Level of expensive Obstacles to international must offer branches requirements remittances Existing access Reach of networks/agents Penetration/use of cards Penetration/use of prepaid Internet banking usage to financial Informal financial access Nonbank provision of cards Unbanked population services financial services Cash-electronic transaction Competitiveness of banking industry ratio (use of cash) Existing mobile Population penetration/ Geographical coverage Level of competition 3G penetration/usage market situation coverage Level of fragmentation of Churnb industry Potential Bill payments Public transport P2P transfers G2P payments demand B2B transfers Credit and microcredit International remittances Savings Retail payments Retail sector Retailers with national Level of fragmentation Postal network Other distribution networks coverage Payment system POS terminal penetration Mass payment acceptance Card penetration National switchc Dominant payment Third-party payment methods in the economy processors Pricing Distortion through Banking services pricing intervention/regulation User perceptions Trust in mobile operators Willingness to pay for Cultural factors versus banks m-money service Sources: IFC Mobile Money Study 2011; CGAP. a. The Gini coefficient is a measure of the inequality of a distribution, with a value of 0 expressing total equality and a value of 1 maximal inequality. b. “Churn” in the telecommunications industry means customers move from one network operator to another. c. “National switch” here means an online interbank fund transfer system. regular checking account requires a government- identification within six months of opening the issued official identification, such as a taxpayer account. Furthermore, most banks do not take card that indicates marital status, parents’ names, advantage of the relaxed requirements because profession, date and place of birth, address, and they are concerned about fraud (CGAP 2010b). telephone number. Opening a simplified account requires less stringent alternative identification, Although regulations allow simpler KYC require- such as records of welfare payments. Neverthe- ments, potential low-income clients eventually less, the client must present government-issued still require official taxpayer cards and (eventually) 18  IFC Mobile Money Study 2011: Brazil government-issued identification for opening a regulations regarding the definition and creation simplified account. of payment institutions is currently under review by the Central Bank’s legal department. These reg- We were not able to ascertain how many Brazil- ulations would address m-payment as a subcate- ians do not have government-issued identifica- gory and provide clarity over emerging payment tion. However, it is notable that as of October approaches, such as e-wallets and prepaid cards, 2010 a new magnetic, chip-based ID card will and provide a framework for supervising such begin to be issued. institutions. This regulation can be expected at the earliest in 2011. Regluation of Agents In a related initiative, the Central Bank also enter- Brazil is well known for its progressive regulation tains plans to create a National Retail Payment and extensive network of correspondent banking Committee through regulation, and is in talks agents. Agents are allowed to conduct the follow- with the Brazilian Federation of Bank Associa- ing functions: deposits, withdrawals, and transfers; tions (FEBRABAN). This committee, which is consultations; prepaid mobile phone top-ups; bill to include representatives of banks, telecommu- payment; forwarding of applications for accounts, nications operators, and clearing houses, would loans, and credit cards; initial credit analysis; loan resolve questions such as the governance of the collection; and international transfers. All Central retail payment industry and conflicts of interest. Bank–licensed financial institutions are allowed to use agents, and the only requirement is to register Existing Access to Financial agents online. Agents must be legal entities. Services Mobile Money–Related Regulation Brazil has, due to its inflationary history, a techno- logically advanced financial system and banking Brazil has no specific m-money regulation, and sector and a diversity of access channels. The use there is uncertainty within the Central Bank over of electronic payment channels (such as debit or whether it has the power to regulate m-money. credit card, and direct debit) is on par with nations Congress is discussing changing current Bank like the United States. In Brazil, checks repre- Law No. 4595 (1964), which specifies the role, sented only 18.9  percent of noncash payments, powers, and functions of the Central Bank. The while the United States still relied on paper-based Central Bank hopes the revised law will give it checks for 28.6  percent of noncash payments in explicit power to regulate m-money, m-banking, 2007 (Central Bank of Brazil 2009a, 2009b). and m-payment. Furthermore, according to some data, while only Current regulations require any organization con- 43  percent of adults use financial services (FAI ducting “deposit taking” to be licensed by the 2009), there are a variety of informal and formal Central Bank. While not explicitly precluding the means that provide access to finance, such as use of m-money by nonbanks, this requirement quasi-credit through retail shop cards and payroll- creates uncertainty for companies without a Cen- consigned loans. tral Bank license in regard to providing services such as P2P, prepaid cards, or e-wallets. Brazil With a hybrid retail banking system, includ- has a civil law system that requires activities to be ing state-controlled and private sector banks, the stated positively in law or regulations in order to market does not appear to be distorted, and state- be allowed. controlled banks are commercially oriented and typically publicly traded on the Brazilian stock The forthcoming regulation on the creation exchange. With more than 150 banks with more of (nonbank) payment institutions will affect than 19,000 branches, Brazil has a strong, com- m-money development in Brazil. A first draft of petitive financial sector. There is no single bank 3. Parameters of the Mobile Money Ecosystem  19  with more than a 33 percent market share among in 2004 to 173 million in 2008, with over a bil- the five largest banks (figure 3.2). lion transactions in 2008, at an average value of R$52 (about US$30). With a total population of slightly more than 190 million, the retail card Figure 3.2  Top Five Banks by Deposits ratio is 0.90. We estimate that a much larger pro- portion of the adult population has de facto access Santander 12% to some financial services if informal means such as retail card credit are included. Banco do Brasil Bradesco 33% Agent Networks 17% The economics, business models, and character- istics of the agent networks have been studied in Caixa detail, especially by CGAP. Numbers on agent Econômic Itau a Federal Unibanco networks vary. Central Bank data from Janu- 18% 20% ary 2010 state that there are 150,000 registered agents, including credit cooperatives. However, informally, it is estimated that roughly 30,000 Source: CIAB FEBRABAN, http://www4.bcb.gov.br/fis/TOP50/ingl/Top50I, acccessed May 2010. are not active, and 40,000 are limited to offering payroll credit through door-to-door visits, leaving about 80,000 correspondent agents.2 Typical enti- While there are marked regional differences and ties acting as correspondent banks are supermar- the metropolitan centers are better served than kets (chains), lottery houses, pharmacies, drug- most states, the differences are not dramatic (e.g., stores, post offices, and car dealers. ATM or POS device per inhabitant is twice the Brazilian average in a couple of states, but mostly Figure 3.3 shows that correspondent banks are used it is closer to the national average). An exception overwhelmingly (75 percent) for bill payments. might be very remote areas (e.g., the Amazon). Overall, the financial sector has considerable reach Conversely, data from a CGAP and FGV survey throughout the country; however, any m-money show that there is a marked difference in the use of strategy must be regionally targeted and tailored. 2  Interview with FGV. Unbanked Population Estimates about the unbanked population vary Figure 3.3  Services for Which Correspondent depending on the definition: the Consultative Banks Are Used Group to Assist the Poor (CGAP) estimates that 70  percent of the adult population still lacks access to bank accounts but admits that there are Other cash-in no official sources to verify the number (CGAP transactions (payments) 2010b). The Financial Access Initiative (2009) 75% says that 43 percent of adults in Brazil use formal Account opening 8% or semiformal financial services (i.e., banks or MFIs). However, there is a large “informal” finan- Deposits 0.2% cial sector; an example is the retail cards issued Withdrawals 7% by major stores, which provide consumers credit Other cash-out at zero or low interest and the ability to pay for transactions 5% Loans 5% purchases in installments. There was a 101  per- Source: CGAP and Central Bank of Brazil 2009. cent increase in retailer cards from 86  million 20  IFC Mobile Money Study 2011: Brazil correspondent agents among urban, semi-urban, (CGAP 2010a) found that 41  percent of the and rural areas. While bill payment accounts for 49 agents interviewed reported being robbed. 88 percent in cities, it is only 40 percent in rural areas (CGAP 2010a). Deposits and withdrawals ATMs and POS Devices are more important in rural areas with 38 percent of transactions, compared with 8 percent in cities. In 2008, there were 158,414 ATMs in Brazil, of which only 43 percent were open access, that is, Geographical distribution throughout the coun- they allowed use by customers from other banks. try is uneven, with the majority of correspon- There were 3.2 million POS terminals in the coun- dent banks in the more populous and prosperous try.3 Interoperability of ATMs and POS terminals southeast (figure 3.4). is a considerable concern, on which the Central Bank has been working since 2002, though it does not have regulatory power to enforce interoper- Figure 3.4  Geographic Distribution of ability. Some shops have up to eight different POS Correspondent Banks terminals to serve their customers. Percent 60 The main development in this sector is that the two major acquirers in Brazil, Cielo and Redecard, which jointly control 90  percent of the market, 40 became nonexclusive in July 2010. This will allow new entrants into the POS market, but may not 20 change the market structure dramatically. How- ever, Santander Bank, which was part owner of one of the two acquirers, is selling its share to 0 enter the POS market. Midwest Northeast North Southeast South Source: CGAP and Central Bank of Brazil 2009. Although some small pilots are developing mobile phone POS devices, industry informants voiced concerns that the business case is not lucrative, Correspondent banking in Brazil is clearly vital and it may be more attractive to equip POS for increased access to financial services. However, devices with NFC technology. some potential developments may harm or reduce the number of correspondent banks, including the Financial Access Channels following: As can be seen in figure  3.5, Brazil has various ƒƒ The viability of agent networks could be options for accessing financial services, with ATMs threatened by lingering legal challenges, which and Internet banking being the most popular (and include agent employees demanding wage the latter showing strong growth). In terms of ATM parity with bank branch workers. terminals per inhabitant, Brazil’s penetration is on par with those of France, Germany, and Italy. ƒƒ The regulatory oversight body for pharmacies is considering new regulation that will make the In 2008, 65 million transactions were made using pharmacy business incompatible with the cor- the mobile phone, which is equivalent to 0.3 per- respondent bank business. A large number of cent of all transactions (Central Bank of Brazil correspondent bank agents are pharmacies. 2009a, 2009b). ƒƒ The fact that correspondent banks remain tar- gets of (organized) crime may influence some 3  As there is overlap and duplication, the number of POS terminals is not identical to the number of retail- larger networks, such as lotteries, to abandon ers accepting credit or debit cards; it is estimated that the business. The CGAP and FGV survey 1.6 million retailers allow card payment. 3. Parameters of the Mobile Money Ecosystem  21  Figure 3.5  Access Channels to Financial Figure 3.6  Market Shares of Major Mobile Services Operators Transactions (million) 10,000 TIM 24% Vivo 8,000 ATM 30% Internet Branches 6,000 4,000 Oi 21% Banking correspondent Claro 2,000 26% Call center Mobile phone 0 Source: Company subscriber numbers as of mid-2010. 2006 2007 2008 Sources: Central Bank of Brazil 2009a, 2009b. operating in a competitive market, with a Herfin- dahl-Hirschman Index (HHI) of 2527. Table  3.2 (on the next page) shows geographi- cal imbalances in physical access to ATMs and No mobile operator has more than a 30 percent POS terminals, with Rio de Janeiro and São Paulo market share (figure  3.6), in contrast to some accounting for more than 40 percent of terminals. countries where a single dominant mobile opera- M-money strategies may therefore need to be geo- tor has facilitated the development of m-money. graphically targeted. While 2G mobile coverage of the population is slightly above 90  percent, 3G network roll-out Existing Mobile Access and was estimated to cover more than 60  percent of Market Situation the population by the end of March 2010. How- Brazil has four main mobile operators, accounting ever, out of more than 5,000 municipalities, just for 95 percent of the market. As table 3.3 shows, 732 were reached by 3G networks in June 2010, the mobile operators appear healthy, though meaning only the big cities and population centers Table 3.3  Financial Data for Key Mobile Operators FY2009 EBITDA FY2009 EBIT Mobile operator R$ (millions) US$ % margin R$ (millions) US$ % margin America Movil (Claro) 2,906 1,652 24.2 476 271 4.0 Oi 7,315 4,158 24.5 1,609 915 5.4 TIM 3,476 1,976 25.0 580 330 4.2 Vivo 5,218 2,966 31.9 1,961 1,115 12.0 Sources: Company annual reports. Note: EBITDA = earnings before interest, tax, depreciation and amortization; EBIT = earnings before interest and tax. 22  IFC Mobile Money Study 2011: Brazil Table 3.2  Access to ATMs and POS Devices by State ATMs POS devices State Quantity % Coveragea Quantity % Coveragea Acre 361 0.2 1,914 6,239 0.2 111 Alagoas 1,257 0.8 2,511 33,688 1.1 94 Amapá 346 0.2 1,811 6,905 0.2 91 Amazonas 1,543 1.0 2,199 31,940 1.0 106 Bahia 7,343 4.6 1,993 186,642 5.9 78 Ceará 3,297 2.1 2,593 81,737 2.6 105 Distrito Federal 3,637 2.3 717 79,218 2.5 33 Espírito Santo 2,832 1.8 1,231 55,943 1.8 62 Goiás 4,321 2.7 1,372 82,102 2.6 72 Maranhão 1,978 1.2 3,219 37,403 1.2 170 Mato Grosso 1,994 1.3 1,505 41,489 1.3 72 Mato Grosso do Sul 1,887 1.2 1,251 30,932 1.0 76 Minas Gerais 15,770 10.0 1,270 263,299 8.3 76 Paraná 9,722 6.1 1,099 198,893 6.3 54 Paraíba 1,793 1.1 2,103 42,245 1.3 89 Pará 2,701 1.7 2,751 49,163 1.5 151 Pernambuco 4,380 2.8 2,011 116,291 3.7 76 Piauí 1,105 0.7 2,846 17,463 0.5 180 Rio de Janeiro 16,877 10.7 949 357,138 11.2 45 Rio Grande do Norte 1,680 1.1 1,868 39,955 1.3 79 Rio Grande Do Sul 11,885 7.5 918 190,990 6.0 57 Rondônia 790 0.5 1,904 15,846 0.5 95 Roraima 229 0.1 1,841 5,827 0.2 72 Santa Catarina 5,514 3.5 1,110 117,427 3.7 52 São Paulo 53,126 33.5 779 1,059,615 33.4 39 Sergipe 1,201 0.8 1,682 17,487 0.6 115 Tocantins 845 0.5 1,529 11,023 0.3 117 Total 158,414 100.0 1,740 3,176,900 100.0 88 Sources: Central Bank of Brazil 2009b; 2009 population estimates from http://www.ibge.gov.br. a. Number of inhabitants per ATM/POS device. 3. Parameters of the Mobile Money Ecosystem  23  are served. Vivo planned to more than double that Retail Sector by the end of 2010. Brazil has a well-developed retail sector, includ- By April 2010, 8  percent of mobile subscribers ing some of the largest retailers in Latin America. were 3G users (figure  3.7) (IHS Global Insight Many are nationwide, whereas some are strong 2010). only in certain parts of Brazil. As 81  percent of the population lives in urban areas, there is wide Customer churn in the Brazilian mobile indus- coverage of the population. The companies Casas try was between 2.5 percent and 3.5 percent per Bahias and Grupo Pão de Açúcar illustrate the month, based on 2009 fourth-quarter reports. nature of the retail sector in Brazil. Figure 3.7  Vivo 2G Network Coverage in Brazil, 2010 Source: © 2011 GSM Association and CollinsBartholomew Ltd. 24  IFC Mobile Money Study 2011: Brazil Casas Bahias, which sells furniture and home Grupo Pão de Açúcar is the largest Brazilian appliances, has more than 565 stores in 11 states retailer of food, general merchandise, electronic and the Federal District. Casas Bahias makes its goods, home appliances, and other products from profit by charging interest on installment plan its supermarkets, super stores, and home appliance stores. The company has 1,647 stores throughout purchases, making it possible for low-income cus- Brazil, including Casas Bahia.4 tomers to purchase products that they would not be able to pay off in a single payment. The chain is Grupo Pão de Açúcar Web site (http://www.gpari.com. 4  currently owned by Grupo Pão de Açúcar, which br/grupopaodeacucar/web/conteudo_en.asp?idioma=1 purchased it in December 2009. &conta=44&tipo=31641), accessed June 16, 2011. User Survey Findings 4 B razil’s survey was different from and there- In contrast, the nonuser survey was conducted fore not easily comparable to the survey face to face in Rio de Janeiro and São Gonçalo, the results from Nigeria, Sri Lanka, and Thai- latter being a slightly poorer neighboring munic- land. In Brazil, the user survey was con- ipality of Rio de Janeiro. As a consequence, the ducted among users of Oi Paggo, which is a demographic differences between users and non- mobile service acting as a credit card with a lim- users are largely due to their locations: users in the ited number of merchants accepting it. Many use northeast were less well-off than the nonusers in it to pay their phone bills and for airtime top-up. Rio de Janeiro and surrounds, as the figures on It does not have any P2P functions or cash-in and average monthly income clearly show. A total of cash-out. 109 nonusers were interviewed. At the time of the survey, Oi Paggo was solely Socioeconomic Profile of owned by the mobile operator Oi. Oi is focused Respondents mainly in the northeast of the country. Oi Paggo Oi Paggo m-money service users were younger provided telephone contact details of its custom- and less affluent than nonusers (figure  4.1.) The ers, and interviews were conducted via phone (all survey data show the following trends for users: other country surveys were conducted face to face). ƒƒ Slightly more were female. For the survey, an m-money user was defined as an active user of the Oi Paggo service; a nonuser ƒƒ There was a higher representation in the younger was defined as a person who used banking or cor- age groups; consequently, fewer were married. respondent banking services and mobile phones, ƒƒ The four largest occupational groups in order but not Oi Paggo or other m-money services. were employees, self-employed, “other,” and students. The user survey was conducted by phone with customers in the large cities of Fortaleza, Recife, ƒƒ They had slightly lower levels of higher educa- and Salvador, which have populations in excess of tion, possibly because they were located in the 1 million and are major economic centers in their poorer regions of Brazil and younger so they states; as well as in the cities of Campina Grande, had not yet completed their higher education. Maracanau, Mosorro, and Parnamirim, which have ƒƒ They were clearly less well-off, which is con- populations of less than 1 million and are more dis- nected to the fact that there is such a strong tant from core metropolitan areas and economic income difference between the Rio de Janeiro influences. A total of 110 users were interviewed. area and the northeast of the country. 25  26  IFC Mobile Money Study 2011: Brazil Figure 4.1  Socioeconomic Characteristics of Mobile Money Users and Nonusers a. Gender b. Marital status Married Male Users Divorced/ Nonusers widowed Female Single 0 20 40 60 80 100 0 20 40 60 80 100 Percentage of respondents Percentage of respondents c. Age d. Occupation Public service 16–25 Executive Professional 26–45 Employee Family business Self-employed 46–60 Not employed Student Agriculture >61 Other 0 20 40 60 80 100 0 20 40 60 80 100 Percentage of respondents Percentage of respondents e. Highest level of education completed f. Average monthly income R$5,100 (>US$2899) 0 20 40 60 80 100 0 20 40 60 80 100 Percentage of respondents Percentage of respondents Source: IFC Mobile Money Study 2011. 4. User Survey Findings  27  These socioeconomic characteristics—younger, Access to credit, surprisingly, wass clearly less less affluent, more students, more self-employed— important, with fewer than 5  percent of users may explain the higher demand for alternative citing this as their top reason for using Oi Paggo, credit services such as Oi Paggo. and only slightly more than 10 percent giving this as their second reason. This does not necessarily Oi Paggo users favored mobile phone–related ser- mean there is little demand for credit, but rather vices such as airtime purchase and airtime trans- that Oi Paggo was not seen as a credit service but fer, and the credit card function for store pur- as a service used to provide convenient payment. chases; these were also the main services offered (figure 4.2). Nonuser Survey Figure 4.2  Oi Paggo Services Used Ninety-two  percent of nonuser respondents had bank accounts. Only 2  percent of respondents Airtime recharge took longer than 30 minutes to access a financial Store purchase service point where they could withdraw money (figure 4.4). This supports the notion that Brazil is Airtime transfer well served (though the nonuser survey was con- Internet purchase ducted in the wider Rio de Janeiro area, where ser- Delivery purchase vice points are plentiful). Balance inquiry 0 20 40 60 80 Figure 4.4  Trip Length to Withdraw Cash Percentage of respondents Percentage of respondents Source: IFC Mobile Money Study 2011. 60 The top reasons respondents used the Oi Paggo 40 service was for the convenience and the ability to make transactions without cash; these categories 20 comprised most people’s first and second choices in figure 4.3. 0 10 minutes or less 10–30 minutes 31–60 minutes Source: IFC Mobile Money Study 2011. Figure 4.3  Top Three Reasons for Using Oi Paggo Services More than 90 percent of responders said it costs Payment convenience R$5 (about US$3) or less to reach a place where Do not have to carry cash they could withdraw money, with over 40 percent Ability to access credit not paying anything (figure 4.5). Ability to control money The value proposition of m-banking and m-money Ability to access remotely First ranked was not clear to customers in Brazil. Although Ability to use where credit cards Second ranked 60 percent of nonusers had heard about m-bank- are not usually accepted Third ranked ing services, figure 4.6 shows that most nonusers Other did not know whether m-banking was cheaper 0 10 20 30 40 50 60 70 than traditional banking services. Percentage of respondents Source: IFC Mobile Money Study 2011. Mistrust of m-banking and its aspects outweighed trust in the new service (figure 4.7). 28  IFC Mobile Money Study 2011: Brazil Figure 4.8 shows that most respondents saw con- Figure 4.5  Cost of Trip to Withdraw Cash venience rather than cost as the major benefit of Percentage of respondents m-banking. 60 Figure 4.8  Perceived Mobile Money Benefits 40 Percentage of respondents rating bene t “high” or “medium high” 80 20 60 40 0 R$0 R$1–R$5 R$6–R$10 R$11–R$20 20 (US$0) (US$0.57– (US$3.41– (US$6.25– US$2.84) US$5.68) US$11.37) 0 Cost Time 24-hour Physical Immediacy Source: IFC Mobile Money Study 2011. saving saving access security of fund transfer Source: IFC Mobile Money Study 2011. Figure 4.6  Perception of Relative Expense of There was relatively little interest in either domes- Mobile and Traditional Banking tic or international remittances (figure  4.9). Key Percentage of respondents interest seemed to be in increased convenience for 60 paying bills (i.e., directly on the phone and not having to line up at a correspondent bank) and 40 in having more locations from which to withdraw and deposit cash. Sixty-two  percent were will- ing to pay a small amount for both bill payment 20 and cash withdrawal (e.g., 1–2 percent of the bill amount) versus 38 percent who believed these ser- 0 vices should be free. M-banking M-banking is Don’t know is cheaper more expensive Figure 4.9  Interest in Using Specific Mobile Source: IFC Mobile Money Study 2011. Banking Services in the Future Savings Figure 4.7  Degree of Trust in Financial Services Withdrawal (mobile agents) Investments Trust in m-banking Bill payment Deposit Trust in banks Insurance High/medium high Trust in m-banking National remittance Low technology Microloans Trust in third-party agent International remittance Pension fund management Security from fraud 0 10 20 30 40 50 60 70 0 5 10 15 20 25 30 35 40 45 Percentage of respondents Source: IFC Mobile Money Study 2011. Source: IFC Mobile Money Study 2011. Business Models 5 B oth MNOs and banks see the advantage Existing Business Model: Oi of combining each other’s strengths and Paggo established functional roles in mobile financial service provision. Most banks Oi Paggo has existed since 2007 and is 100 per- and operators are currently working out models cent owned by the mobile operator Oi, one of the of the partnerships, addressing who owns the cus- four major operators of Brazil, but the one with tomer and determining the details of how to share the smallest market share (20.6 percent). It has a revenues. Nevertheless, m-money applications in strong subscriber base in the less affluent northeast Brazil are typically led by banks, and no mobile of the country. Oi Paggo is basically a credit card operator could develop services without a bank- business, with the actual credit card replaced by ing partner. the phone. A mobile phone also serves as the POS device for merchants. Oi Paggo merchants also All major banks offer their customers m-banking capture transactions through electronic standard- services, consisting of account transfers (intra- ized (multibrand) terminals, electronic commerce and interbank), payments, account information, solutions, and regular POS devices. The credit investment management, and loan requests. Most card business is very attractive in Brazil because banks offer several m-banking technologies for there is both a strong, unmet demand for credit— the global system for mobile communications especially in the C-class—and fairly high credit (GSM), including wireless application proto- spreads on monthly balances, from 5 to 15  per- cols 1 and 2 (WAP1 and WAP2), and 3G (e.g., cent per month, thus interest rates are profitable. smartphones). In 2008, 65  million transactions (0.3 percent) used mobile phones (Central Bank As shown in table  5.1, Oi Paggo had 75,000 of Brazil 2009a, 2009b). Bradesco saw a 28 per- merchants, although they ranged from inactive cent increase in m-banking from last year. Its focus to high performers. In the long run, Oi Paggo is on increasing the convenience, ease of use, and planned to target smaller informal merchants for security of m-banking because it feels m-banking whom the traditional POS device, at a R$100 would otherwise only be used in situations where (US$57) monthly rental fee, is not economically other channels are not accessible. These types of viable. It has completed pilot studies with micro- m-banking services are primarily additional access merchants, who require faster payment (e.g., after and banking channels, rather than new business 7 days rather than the standard 30 days) and are cases. also more difficult to reach and acquire. 29  30  IFC Mobile Money Study 2011: Brazil Table 5.1  Oi Paggo Business Model Element Description Business objective ƒƒ Achieve profitability ƒƒ Increase telecommunications business (e.g., phone service top-up increased by 30% among Oi Paggo users) Main value To merchants: proposition ƒƒ Acquirers typically charge 4–6% from merchants, a lot for “mom and pop shops” and Oi Paggo has a price advantage with 2.99% ƒƒ No POS rental fee, which is typically R$100 (US$57) with other acquirers To customers: ƒƒ Convenient way to pay phone bill and top-up ƒƒ Credit card functionality, convenience Strategy Create partnership with major bank ƒƒ Oi Paggo would have access to one of the two dominant card acquirers in the country, both owned by major banks ƒƒ Oi Paggo would be accepted by the acquirer’s POS system and merchants, with more than 1 million POS ƒƒ Once partnered with a bank, Oi Paggo plans to offer additional services, such as P2P and prepaid e-wallets (as it has a cash-in and cash-out network through the correspondent banks of its bank partner) Target market ƒƒ Male and females under age 35 ƒƒ Target the middle class (C-class), because it shows demand for credit (cards) and will pay interest; C-class also has lower penetration of Visa and MasterCard ƒƒ Demand is the same as for the credit card market, 7–8% of Oi subscribers, with a maximum close to 10% Marketing strategy ƒƒ Cross-marketing through Oi ƒƒ Mobile marketing campaigns combined with aggressive telecommunications bonusing as a promotional currency Revenue streams ƒƒ Main revenue (~70%) comes from the 15.99% monthly interest charged on outstanding balances ƒƒ Monthly flat usage fee from users of R$2.99 (US$1.70) if there has been activity during that month—activity includes an outstanding credit—represents 10% of revenue ƒƒ Merchants pay Oi Paggo 2.99% on all purchases made through Oi Paggo, representing 15–20% of revenue ƒƒ Currently not profitable Costs ƒƒ Costs of acquiring a merchant are R$130 (US$74), including commercial/sales effort, subscriber identity module (SIM) card, training, technical set-up, and labor but not marketing material and signage ƒƒ 15–20 Oi Paggo staff look after merchants, roughly 1–2 persons per city; they visit merchants every few months, focusing on those who make the majority of transactions Transactions ƒƒ Transaction numbers are confidential ƒƒ Typical split of transactions is two-thirds for top-up and one-third for other purchases ƒƒ Average top-ups are around R$10 (about US$6), and other purchases average R$63 (US$36) Merchants ƒƒ 75,000 merchants, with various levels of activity Users 250,000, broken down as follows: ƒƒ 100,000 who use Oi Paggo only to pay their phone bills ƒƒ 150,000 signed up as m-payment users; nearly 50% of whom had used the product in the prior three months Pipeline Now that Oi Paggo is partnered with a bank, it plans to launch a range of new services in 2011: ƒƒ P2P transfers ƒƒ Prepaid e-wallets—have cash-in and cash-out network (through correspondence network of partner bank) ƒƒ Limited or small credit (e.g., only for airtime top-up) ƒƒ Bill payments (e.g., utilities, electricity); people would enter a bar code into their mobile phone to authorize debit/credit Model/partners Bank-centric—the bank’s incentive is as follows: ƒƒ Access to Oi subscribers ƒƒ Sell traditional credit cards to Oi subscribers ƒƒ Superiority of Oi Paggo to plastic cards because there is less opportunity for fraud and higher security ƒƒ Mobile is a good channel for banks to interact with clients Source: IFC Mobile Money Study 2011. 5. Business Models  31  Oi Paggo’s 250,000 users were divided between 100,000 who simply use Oi Paggo to pay their Box 5.1  Update on New MNO-Bank Partnership phone bills, and 150,000 who are signed up as m-payment users. Oi Paggo’s main revenue (about Since the field study in April 2010, there were the following 70 percent) comes from monthly interest charged developments. Federally controlled Banco do Brasil and on outstanding balances. Brazil’s leading card acquirer Cielo have signed deals with the country’s largest telecommunications firm, Tele Norte Leste As of 2010, Oi Paggo was not profitable. To reach (Oi) “with the purpose of establishing a business partnership economies of scale and to increase its acceptance as to issue co-branded credit cards and pre-paid cards,” as well a payment instrument, it needed a bank partner. as working on increased mobile payment with Oi’s client Oi is currently in talks with three major banks to base. Banco do Brasil, which owns a controlling stake in Cielo sell 50 percent of Oi Paggo and create a partner- jointly with the private sector bank Bradesco, had Cielo’s ship (box 5.1). Through the new bank partner, Oi equity holding arm, CieloPar, take a 50 percent stake in a new Paggo will have access to one of the two domi- company called Paggo Soluçoes, with an Oi subsidiary Paggo nant card acquirers in the country, as those are Acquirer taking the other half. owned by major banks. Part of the deal will be Paggo Soluçoes is now conducting activities in connection that Oi Paggo will be accepted by the acquirer’s with the capture, transmission, processing, and payment POS system and merchants, which has over 1 mil- of business transactions with the m-payment technology lion POS devices. Once partnered with a bank, originated or completed in cellular phone devices and Oi Paggo plans to offer additional services, such as accrediting current and new stores to its acquiring network P2P and prepaid e-wallets (as it will have a cash-in of transactions originated in cell phone devices through the and cash-out network through the correspondent existing relationships of Cielo and Paggo Acquirer all over banks of its bank partner). Brazil. The deal has been cleared by Brazil’s antitrust regulators. In conclusion, either this will be a transforma- Cielo plans to invest US$1.17 million into the joint venture and tional year for Oi Paggo—if it secures a bank part- believes that no major additional investments are required, ner and becomes a bank-backed m-money oper- because the controlling companies already have the capability ator—or Oi Paggo will be struggling to find an and infrastructure to operate this activity. alternative strategy. ƒƒ Access to the low-income unbanked market, Banks because low-cost bank accounts through mobile channels can increase penetration. Banks in Brazil see the following potential advan- tages for partnering with mobile operators: Bradesco provides a service by which account holders can recharge their phones with airtime, ƒƒ Access to mobile subscribers, especially as a using a user-friendly interactive voice response communication and sales channel with clients system. Currently, 1.5 million mobile subscribers ƒƒ Promotion of traditional credit cards to mobile from Claro and Oi use this service, with 260,000 subscribers recharges per month at an average recharge ƒƒ Introduction of alternative products like Oi amount of R$22 (US$13). Bradesco charges the Paggo’s—mobile credit card1 mobile operators a commission, but it is less than the approximately 15 percent distribution costs of mobile operators. 1  A mobile credit card offers higher security and less opportunity for fraud than its plastic counterpart, especially for purchases made via phone or the Inter- net. Mobile technology eliminates the need to pro- understandably reluctant to do, and confirms purchases vide credit card details, which many consumers are with a short message service (SMS) text message. 32  IFC Mobile Money Study 2011: Brazil Another initiative is the Visa mobile pay service Insurance offered by Banco do Brasil. The Ourocard Visa Vivo is already offering insurance products such cardholder must register only once at the Banco as mobile handset theft insurance (with the Span- do Brasil Internet portal (bb.com.br). After that, ish company Mapfre) and life insurance (with when making a purchase—via fixed telephone, Santander). A three-month unemployment mobile phone, or in person—at a commercial insurance and housing insurance plan was to be establishment affiliated with the Visa mobile pay launched in 2010. Costs vary, but are typically service, the customer may request payment by small—e.g., R$4.99 (US$2.84) per month for phone. The carrier must report only the mobile insurance coverage of R$5,000 (about US$2,800) phone number and name of the issuing bank. for accidental death, R$10,000 (about US$5,700) Once payment is processed by Visa and the Banco for permanent disability through accident. At the do Brasil, the holder receives an text message to end of 2010, Vivo had sold 300,000 mobile hand- confirm the purchase. set theft insurance plans with Mapfre and 400,000 life insurance policies with Santander. Many other initiatives are being piloted, includ- ing use of NFC technology. Often, though, these Insurance seems to complement the trend for are technology trials rather than business case credit consumer purchases, as first-time buyers of pilots. cars, houses, and smaller items insure their assets. These relatively small monthly payments are ideal for mobile phone payments. Furthermore, unem- Mobile Operators: Vivo ployment and life insurance can protect lower- Vivo is Brazil’s largest mobile operator, with income clients. 60 million subscribers at the end of 2010 (42 mil- An obstacle facing Vivo is that it can only offer lion prepaid) and a 30  percent market share. these insurance programs to postpaid clients (typ- Vivo envisions itself as having a financial trans- ically wealthier people, who are not actually the action business (including insurance products) in target market). Mobile operators get taxed on air- addition to its communications and info-enter- time; if they want to accept payment for insurance tainment business. However, it is not trying to or other services from their prepaid clients, those become a bank, a credit card company, an insurer, clients can only do that through airtime top-up. or an acquirer. Rather, it prefers to be the inter- At this time, the telecommunications regulatory mediary between the financial sector and its sub- body, Anatel, does not recognize nontelecommu- scribers. It plans to complete subscriber research nications revenue from airtime top-up because it to identify needs and demands, and then discuss would result in double taxation of insurance pay- possible products with banks. It envisions either ments (i.e., revenue as airtime and revenue as partnering with banks or contracting banks to insurance). However, this regulatory problem is offer services to its clients. solvable. Vivo targets the low-income segment—banked A recently launched product may solve the issue: and unbanked—and plans to create revenue by life insurance for personal accident offered as a selling financial services and charging fees for combo top-up. Customers buy a regular top-up usage and transactions. of R$12 (US$6.82) plus R$3 (US$1.71) for the insurance, for a total of R$15 (about US$8.50). Like other MNOs, Vivo is in talks with banks to Vivo transfers R$3 (US$1.71) to the insur- offer m-banking services. Existing account holders ance company, ACE, and the client receives a would be able to receive their account statements, R$10,000 (about US$5,700) insurance coverage status, and alerts via mobile phone and later make product (30 days coverage). Vivo invites custom- P2P transfers and pay bills. ers to buy this combo every month. In this way, 5. Business Models  33  Vivo does not pay a telecommunications tax, as acquirers), banks are able to find profitable niche this amount is not a top-up. markets or serve existing customers. However, they will not reach a critical mass to make a com- Credit Cards pelling business case. Vivo also offers a credit card (MasterCard) jointly FEBRABAN therefore has conducted studies on with a major Brazilian bank, Itau Unibanco, with m-money market segments and has hired two access to statement information over the mobile consulting firms to work on a model that deter- phone. At the end of 2010, there were 500,000 mines the following: Vivo Itau Unibanco credit card holders. ƒƒ To what extent and in which areas should banks, credit card companies (acquirer and Mobile Payment/Transfer issuer), and mobile operators collaborate to A pilot is planned, involving Vivo, Itau Unibanco, reach economies of scale and create a profit- and MasterCard Global, for mobile wallets and able mass market? What is the business model? payment systems. Targeted are clients of Vivo, Itau What services will be profitable? Unibanco, and MasterCard, who will be asked to ƒƒ In which areas should the players remain free get a new SIM card for their mobile phones that to compete? includes MasterCard software and subscribe with Itau Unibanco to receive a special personal iden- ƒƒ What is required to address common standards, tification number (PIN). This program will allow interoperability needs, and joint platforms? P2P, payment to merchants, and bill payment. It planned to present the findings to its board of directors in April 2010. Distribution Although Vivo has an extensive distribution net- FEBRABAN has board approval for these stud- work for prepaid scratch cards (top-up cards) with ies, but as an industry body, it has no power over more than 500,000 points of sale, most of these the adoption or implementation of its recommen- stores are managed by different dealers. It has 300 dations. FEBRABAN and stakeholders have suc- of its own stores and approximately 3,000 fran- cessfully collaborated in the past on standardizing chise partners. an electronic direct debit model, which is char- acterized by a tier of shared-use infrastructure and another tier of competitive service offerings. Industry Association Approach Although it took several years to reach a consensus FEBRABAN, the main Brazilian banking asso- and then several more years to implement, it is a ciation, believes that with the current approach successful precedent for an industrywide collabor- (individual banks seeking partnerships with spe- ative/competitive approach that creates economies cific MNOs, individual credit card issuers, and of scale and grows the market. 6 Conclusion O f the four countries studied, Brazil is the There is considerable demand and opportunity for farthest along the m-money demand credit and microcredit, especially among the low- curve (see IFC Mobile Money Study income population. However, only now that is it 2011: Summary Report, chapter 5) with linked to a major bank does Oi Paggo’s credit card the highest penetration of electronic payment and other m-money offerings have prospects for a cards. There is an opportunity for mass adoption large market. Oi Paggo’s partnerships with a major of m-money only if the m-money product can bank, Banco do Brasil, and the credit card acquiring integrate itself seamlessly into the financial ser- company, Cielo, which owns approximately 50 per- vice industry and infrastructure. This integration cent of Brazil’s credit card POS infrastructure and is evidenced by the m-money provider Oi Paggo, has relationships with merchants (i.e., an acceptance which provides a credit card service linked to the network for m-payment), may provide good pros- mobile phone. pects for m-money and m-payment in Brazil. 34  Appendix A Fact Sheet and Demand Estimates Table A.1  Fact Sheet Country Profile Population 191.5 million a Sector shares of GDP Geographic area 8.51 million sq. km Agriculture 6% GDP US$1.574 trillionb GDP per capita US$10,456 Industry Gini index 55.0c 26% Rural population 16%d Services 68% Rural poor 9.4% (18 million)e Population below poverty line 26% (49.8 million) (calculated; 2008) Financial Profile Number of banks 130f (2006) Top ve banks by deposits Total branches 19,100 Santander 12% Total correspondent banking 108,000g; 150,000h agents Banco do Brasil Number of bank accounts 125.7 million accountsi Bradesco 33% (2008); 0.656 per capita 17% Banking penetration 43% (2008)j Caixa Econômic Itau a Federal Unibanco 18% 20% 35  36  IFC Mobile Money Study 2011: Brazil Financial Profile (continued) Number of POS devices 3.18 million (2008);k 0.017 Financial cards (millions) per capita 207.9 Number of ATMs 158,414 (2008); 827 per 1 k 173 million pop. 137.8 Number of financial cards 519.2 million; per capita 2.71 Credit card growth 53.5 million (2004) 0.472 137.8 million (2008); 26.7% avg. yearly growth 2004-08 Credit Debit Retailer Charge Remittance flow—inbound US$5,089 millionl (Japan, Access channels to nancial services (transactions in millions) United States, Spain) 7,954 Remittance flow—outbound US$1,191 million (Portugal, ATM 7,247 Spain, Lebanon) Internet Branches Number of MFIs 1,961m 5,774 Number of MFI accounts 780,000 Banking correspondent 2,310 1,596 Call Centre Mobile phone 65 Herfindahl-Hirschman Index 2233 n 2006 2007 2008 (HHI) Mobile Profile Main mobile operators 4 Mobile market share Mobile coverage 90.6%o Number of mobile subscribers 134.43 million (calculated) TIM 24% Vivo 30% Mobile penetration 95.9%p Internet user penetration 0.376 (72.028 million) (2008)q Oi Broadband penetration 5.8%r 21% Claro 26% Herfindahl-Hirschman Index 2527 (HHI) Note: All data are for 2009 unless otherwise stated. — = not available. a. CIA 2010. b. International Monetary Fund, World Economic Outlook Database, April 2010; http://www.imf.org/external/pubs/ft/ weo/2010/01/weodata/weorept.aspx?sy=2009&ey=2009&scsm=1&ssd=1&sort=country&ds=.&br=1&pr1.x=42&pr1. y=8&c=223&s=NGDP_R,NGDP_RPCH,NGDP,NGDPD,NGDP_D,NGDPRPC,NGDPPC,NGDPDPC,PPPGDP,PPPPC,PPPSH,PPPEX,PCPI,PCPIP CH,PCPIE,PCPIEPCH,LP,BCA,BCA_NGDPD&grp=0&a=#download. c. United Nations Development Programme, Human Development Report Statistics 2009, http://hdrstats.undp.org/en/indicators/161.html. d. Population Reference Bureau 2009. e. IFAD 2010. f. CGAP 2009. Appendix A. Fact Sheet and Demand Estimates  37  g. CGAP 2010b. h. FGV estimate. This figure is for active agents and does not reflect dormant registrations or very small agents going door to door selling financial services. i. Accounts of commercial, savings, and universal banks and credit unions. j. FAI 2009. k. Central Bank of Brazil 2009a, 2009b. l. GSM Association, 2010 Brazil Mobile Money Status, http://www.wirelessintelligence.com/mobile-money/. m. Credit cooperatives and nonbanking financial institutions. n. The HHI is calculated based on market share of deposits (Central Bank of Brazil 2009a, 2009b). o. International Telecommunication Union, World Telecom ICT Indicators, http://www.itu.int/ITU-D/icteye/Indicators/Indicators.aspx. p. Anatel’s latest mobile subscriber figure: 183.7 million from May 2010. q. World Bank, World Development Indicators 2008; ITU for Internet user penetration figure. r. Cisco Systems 2009. 38  IFC Mobile Money Study 2011: Brazil Table A.2  Demand Estimates Socioeconomic data Population (millions) 191.5a GDP per capita (US$) 10,456b Gini index 55c Financial data Bank accounts (million) 125.7d Banking penetration (percent) 43.0e Number of POS devices (million) 3,180,000f POS devices (per million inhabitants) 16,606 Number of ATMs 170,240g ATMs (per million inhabitants) 889 Payment cards (million) 519d Payment cards (per million inhabitants) 2,711,227 Mobile data Mobile operators 4 Mobile penetration (percent) 70.2 Number of mobile subscribers (million) 134 Potential demand E-payments (per month) Unknown G2P (transactions per month) 16,666,667h Payroll, informal sector (transactions per month) 48,081,050i P2P (transactions per month) Unknown Public transport (trips per month) 1,421,900,000j Unbanked (persons) Unknown Utility payments (per month) 164,311,579k a. CIA 2010. b. International Monetary Fund, World Economic Outlook Database, April 2010; http://www.imf.org/external/pubs/ft/ weo/2010/01/weodata/weorept.aspx?sy=2009&ey=2009&scsm=1&ssd=1&sort=country&ds=.&br=1&pr1.x=42&pr1. y=8&c=223&s=NGDP_R,NGDP_RPCH,NGDP,NGDPD,NGDP_D,NGDPRPC,NGDPPC,NGDPDPC,PPPGDP,PPPPC,PPPSH,PPPEX,PCPI,PCPIP CH,PCPIE,PCPIEPCH,LP,BCA,BCA_NGDPD&grp=0&a=#download. c. United Nations Development Programme, Human Development Report Statistics 2009, http://hdrstats.undp.org/en/indicators/161.html. d. Central Bank of Brazil 2009a, 2009b. e. GSM Association, 2010, Brazil Mobile Money Status, http://www.wirelessintelligence.com/mobile-money/. f. Central Bank of Brazil 2009b. g. CIAB FEBRABAN 2009. h. 200 million Caixa Econômica Federal annual payments (Bolsa Familia plus others). Appendix A. Fact Sheet and Demand Estimates  39  i. Total labor force: 95,210,00; with 49.5 percent in formal sector; 48,081,050 informal workers; assumes monthly payment frequency. j. 16.8 billion public transport (bus and rail) trips and 262.8 million taxi trips per year (180,000 taxis, assuming average 4 trips per taxi every day per year) (ANPT 2009). k. 33,200,000 postpaid mobile subscribers (calculated from CIA 2010 and Anatel website); 41,497,000 fixed-line subscribers (ITU 2009); 46,867,105 households paying electricity bills (IEA 2008); 38,803,947 households having water connections (WHO-UNICEF JMP 2008), of which 34,147,473 pay bills (calculated from World Bank 2003); 8,600,000 pay TV subscription (Anatel). Appendix B Persons Interviewed Cassio Marx Rabello Da Costa, Especialista, ABDI Klaus Gottsfritz, Products and Markets, Cielo (Brazilian Agency for Industrial Development) Rogerio Fernandes Signorini, Product and Market Mardilson Fernandes Queiroz, Senior Advisor, Development, Cielo Department of Banking Operations and Joaquim Kiyoshi Kavakama, Chief Executive Payment Systems, Banco Central Do Brasil Officer, Camara Interbancaria De Pagamentos (Brasilia office) John Alessandro Dias, Assessoria Tecnica, Elvira Ventura, Assessora Plena, Banco Central Do FEBRABAN Brasil (Rio de Janeiro office) Walter Tadeu Pinto de Faria, Assessoria Tecnica, Delio Galvao, Analyst, Banco Central Do Brasil FEBRABAN (Rio de Janeiro office) Lauro Gonzalez and Eduardo Diniz, Coordenador/ Natacha Litvinov, Superintendente Canais Professors, FGV Electronicos, Centro Tecnico Operacional, Banco Itau S.A. Marcello Kieleng Veronese, Channels Executive Superintendent, Latin America, HSBC Guilherme Castanho Franco Montoro, Gerente, Area de Inclusao Social, BNDES Roberto Rittes de Oliveira Silva, Diretor Geral, Oi Paggo Marcos Bader, Head of Alternative Channels, Banco Bradesco S.A Eduardo Neubern, Gerente de Rentabilizacao, Oi Paggo Raul Francisco Moreira, Executive Manager, and Board Member of ABECS (Brazilian Credit Chrstianna Pessoa, Gerente de Vendas, Oi Paggo Card Association), Banco Do Brasil Ronaldo Varela, Executive Director, Marketing Roberto Barros Barreto, Spuerintendente Nacional, and Business, Getnet Tecnologia em Captura e Caixa Econômica Federal Processamento de Transações Mauro Henrique Macedo Pessoa, Gerente Anderson Jorge Lopes Brandao, Director de Nacional, Caixa Econômica Federal Beneficios, Secretia Nacional de Renda de Cidadania, Ministerio do Desenvolvimento Jose Antonio de Sousa, Gerente Nacional, Caixa Social e Combate a Fome Econômica Federal Walter Ribeiro da Silva, M-projects Rodrigo Duarte de Castro Souza, Gerente de Padroes e Planejamento, Caixa Econômica Edmar Prado Lopes, Treasurer, Net Servicos Federal Fabio Luciano Aires, Net Servicos Fabricio Costa, CGES Marcio Oliveira da Silveira, Managing Director, Francisco Parreira, CGES Qspan Technologies Limited 40  Appendix A. Fact Sheet and Demand Estimates  41  Taniara Castro, Unidade de Acesso a Mercados e Daniel Haiidamus Bettamio, Tribanco Servicos Financeiros, Sebrae RJ Cesar Moreira, Tribanco Juliana Estrella, Small Enterprise Coordinator, Sebrae RJ Marcelo Sarralha, Diretor de Produtos, Visa Alberto Blois, Director, Sindicato das Empresas de Percival Jatoba, Diretor Executivo de Produtos, Informatica Visa Luiz Starling, Regional Product Manager, Mauricio Romao, Diretor de Prod. e Servs. SmartTrust Financeiros, Vivo References ANPT (Associação Nacional de Transportes —. 2010b. “Update on Regulations of Publicos). 2009. “Sistema de Informações da Branchless Banking in Brazil.” http://www.cgap. 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