Telefonica Moves Into Mobile Money Market In Argentina
May 23 2012 - 6:53PM
Dow Jones News
Spain's Telefonica SA (TEF) and MasterCard (MA) on Wednesday
launched a mobile money service in Argentina with an eye on
millions of wireless users who don't have a bank account.
Telefonica and Mastercard plan to eventually offer the service,
dubbed Wanda, in a dozen Latin American countries through a 50-50
joint venture.
Wanda is based on a virtual prepaid debit account linked to a
cell phone. Argentine users can transfer money between Wanda
accounts, buy air time, make purchases at participating stores, and
soon will be able to pay bills, Wanda general manager Ramiro Gomez
said.
"We're mainly focusing on people outside the banking system,"
which is as many as 50% in Argentina, Gomez said at a press
conference Wednesday.
Many Argentines shun banks due to the country's long history of
banking crisis. For people living in the rural hinterland, bank
branches are few and far between.
"We're offering a solution to someone who doesn't have a bank
card," Gomez said.
While banking use is relatively low, Argentina boasts one of the
highest mobile-phone ownership rates in the world.
In 2010, Argentina had about 142 mobile phones for every 100
residents, according to the International Telecommunications Union.
By comparison, Brazil had 104 per 100 residents, Japan 95 and the
U.S. 90.
Telefonica's local wireless subsidiary is one of the large
mobile-phone operators in Argentina with about 17 million active
mobile accounts.
Telefonica and MasterCard hope to match the success of mobile
money services in African countries such as Sudan, Algeria, Kenya
and Gabon.
As many as 93% of Kenyans use mobile phones and 73% use mobile
money services, according to a World Bank report published in
March.
Wanda users will pay a fee for making fund transfers, although
store purchases don't carry a fee. Basic accounts will be limited
to holding 6,500 pesos ($1,461). The company hopes to link the
service to bank accounts and credit cards in the future, but for
now will only provide a prepaid service.
The system also has the potential to challenge international
money transfer providers such as Western Union (WU) that are used
to send remittances between countries in Latin America. But for
now, Byzantine money transfer regulations in the region, especially
in Argentina, make this impractical.
"We're taking it step by step," Gomez said.
The service is limited to cellphone customers of Telefonica's
Movistar in Argentina. Rivals such as Telecom Argentina SA (TEO,
TECO2.BA) and Claro, a unit of Mexico's America Movil SAB (AMOV,
AMX, AMX.MX), haven't moved into the business so far.
-By Shane Romig, Dow Jones Newswires; 54-11-4103-6738;
shane.romig@dowjones.com