Monitise set for revenue boost from new three-year Visa deal
06 March 2013 | 7459 views | 1
UK mobile payment outfit Monitise has provisionally entered a new three-year agreement with Visa Europe guaranteeing a minimum of EUR45 million in revenues over the course of the term.
Heads of terms have been signed for the agreement, which covers licence rights to all aspects of Monitise's mobile technology. As part of the arrangement, Visa Europe will be granted a warrant to purchase 43m ordinary shares of 1 pence each in Monitise at a price of 36.25p per share, representing the closing mid-market price of 4 March 2013, plus a further warrant for an additional six million shares.
Visa Europe already owns 7.5% of Monitise stock under a previous agreement entered into in February 2011. This followed a deal struck with Visa Inc in 2009 for the adoption of Monitise technology in the US.
Monitise chief commercial officer Lee Cameron says: "Payments is about partnerships and Visa is the industry benchmark for trusted payments innovation globally. This agreement underpins our growth expectations."
There are 466m Visa accounts in Europe and the payments processor predicts that by 2020 more than half of its transactions will be carried out on a mobile device.
Monitise stock has been treadmilling since December when the company warned of a delay on its target to break even in 2013. In February, the company posted a half year loss of £14.7 million, despite a 63% rise in revenue, following the acqusition of US mobile outfit Clairmail.