Brazilian Mobile Money Initiative Skirts Data Limits, Banking Rules
PagCell, a mobile payment solution unveiled by Brazilan firm Tivit, is taking a unique tack in the mobile money world. The initiative lets customers purchase items using their mobile phones, but it does not result in a big hit on their data plans nor does it force mobile operators to process banking transactions, an activity that is illegal under Brazilian law.
RCR Wireless reports customers using PagCell simply download an app and fill out a form with their information, including linked bank account or credit card number. No further communication over the network is required. PagCell then generates unique QR codes that retailers process at checkout to perform the transaction. The idea is to transform phones into credit cards without using the phone to perform the actual transaction. While the company has no customers yet in Brazil, Tivit said it is negotiating with banks and acquiring and payment processing companies, and that a company in Mexico has bought the solution.
Yankee Group Senior VP of Research Wally Swain comments
“Generating a QR code to authorize a normal bank transaction has tremendous advantages for all points in the value chain. The client can have mobile payments without the cost of an NFC-enabled phone, the merchant has a lower cost point-of-sale terminal and the financial regulators are happy that the banks handle the transaction. This illustrates two points we have been making recently: 1)
QR codes have an important role to play in mobile transactions before—and perhaps even after—NFC infrastructure is deployed; and 2) at least in emerging markets, the
banks control important bottlenecks like regulation. This technology leaves only a limited role for the operator: transmitting the banking information to PagCell one time at registration and transmitting the QR code. These could be ‘normal’ SMS or Web-based transactions where there is no value-added role for the operator whatsoever. Operators will struggle to play a role in a QR-code-based mobile payments ecosystem.”
