The card payments market in Mexico is gearing up towards a more innovative environment after years of dominance by the large traditional banks. Last week it was announced that a Brazilian bank (Itaú) is partnering with Telefonica‘s Movistar brand in Mexico to launch an interesting benefit package for holders of the Itaú card. It’s not clear yet if this alliance would lead to some kind of payment application on the mobile devices of Movistar‘s enormous customer base, but it would make sound business sense to implement it in the medium term. Interestingly enough, Itaú does not have a banking licence in Mexico, despite the fact that it launched its branded card in 2008 and currently has about 10K customers. Since its launch in Mexico, this credit card has been operating as a pure play consumer credit card, emulating a successful business model for consumer credit in Brazil, where it has issued 56 million cards. This breaks with the traditional marketing approach in Mexico, where credit cards are only offered to bank customers who hold for some time other liquid accounts with the issuing bank (typically a checking or savings account). The Itaú card also runs on Visa and MC‘s POS so it has all the features to run smoothly on the payments system. The alliance with Movistar could enable Itaú to quickly switch on million of mobile customers into credit card holders and catapult it to compete head on with the large Mexican banks.
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