Mobile Financial Service, the Brazilian joint venture announced last between wireless carrier Telefónica and MasterCard Worldwide, is ready to launch Brazil's first mobile payment service: Zuum. According to MFS, the service will launch in five cities in the state of São Paulo and in Belo Horizonte, the capital city of the state of Minas Gerais.

The service will be available to subscribers of Vivo, Telefónica's brand in Brazil. Those cusomers will be able to access a prepaid account on their phone to transfer money, buy credits for Vivo's prepaid mobile phones and pay bills.

Another option is to use a prepaid card from MasterCard connected to the same prepaid account. With the prepaid plastic, users can pay offline or withdraw money from ATMs.

"Brazil is a country that loves and invests in technology and has a big number of people without access to financial services ... the so-called unbanked population," said MFS president Marcos Etchegoyen. Zuum has arrived to meet this demand and to make the life of Brazilians easier."

The hope is that Zuum will establish mobile payments, reach unbanked Brazilians and provide a cheaper alternative payment method.

Users of Zuum will pay not maintenance fees and will only pay a fixed price for the card. Transactions are assessed a small fee that is returned to the user as a bonus credit for the mobile phone.

The service will begin this month and is expected to have national coverage by 2014. 

Read more about money transfer/P2P payments.