Mauricio Romao, director at Brazil's Vivo, shared the story at Carriers World Asia of how two and a half years ago the telco started its diversification into financial services.
Vivo is Brazil's largest mobile operator with 80 million users.
The decision was made early not to become a bank, but to forge partnerships. Half of the population in Brazil remains unbanked.
One of the first projects was a credit card with a point-based loyalty programme and double top-up promotions and zero percent interest on handsets. In 24 months Vivo signed up a million users. Profit is shared 50-50 with the bank. More recently, they have looked into mobile access for servicing the card.
Most bank accounts in Brazil attract a $10 a month maintenance fee. Vivo partnered with the second largest bank in Brazil, Brandesco and gave that 10 dollars back as call credit. The actual fee is shared with $3 a month going to the telco. This greatly helps reduce churn. Soon after it was launched, many other banks came round asking for a similar deal.
Vivo sells insurance a number of ways, partnering with ACE insurance. For instance, on scratch-card top-ups which are still used by half its customers. A new type of card was introduced with $7 call credit and $1.50 in insurance on the same scratch-card.
Another is double billing for post-paid customers. A separate optional insurance bill is included in same envelope as the monthly bill and insurance can be purchased simply by paying the bill.
Personal accident insurance policies start at $8 a month. Vivo's cut from insurance products is between 25 to 30%. 75 million US dollars worth of revenue was sold last year.
This year, Vivo has introduced a new pre-paid Mastercard with a focus on using it for topping up prepaid accounts. Instead of paying 8-9% commission for agents or 5% to PayPal, as this is a direct relationship, Vivo pays less than 2% to Mastercard for top-ups. P2P payments are also an important sector. This is a joint-investment and Vivo shared 50% of cost and profit.