Visa has stepped up its assault on the e-commerce market with the $190 million acquisition of PlaySpan, provider of a payments platform for digital goods.
Visa has agreed to pay $190 million in cash, plus extra payouts for performance milestones for Santa Clara-based PlaySpan, which, according to TechCrunch, was founded in 2006 by 12 year old Arjun Mehta.
PlaySpan provides what it calls a 'Monetization-as-a-Service' platform that allows merchants to make money from content such as game credits, premium memberships and digital goods. The UltimatePay product, enables users to make safe and convenient in-app purchases using over 85 global payment methods in 180 countries.
The card giant says its latest acquisition complements last year's $2 billion deal to buy online payment and security outfit CyberSource, giving it a foothold in one of e-commerce's fastest growing areas, digital and mobile commerce.
Visa cites research from JP Morgan claiming that global e-commerce sales last year hit $948 billion. Of this, digital goods is estimated to have accounted for a modest $25 billion but this is expected to soar to $280 billion by 2014, according to Forrester Research.
The acquisition is slated to be completed in Visa's fiscal second quarter 2011, pending regulatory approvals, and is expected to be slightly dilutive to earnings per share in fiscal 2011.