Visa has stepped up its investment in emerging mobile payments market with a $110 million cash deal to buy Fundamo, a provider of mobile financial services technology for banks and wireless operators in developing economies. The card payment scheme has also formalised an extended five-year agreement with m-banking outfit Monitise.
Visa says the the combination of acquiring Fundamo and expanding the relationship with Monitise will enable the company to deliver mobile financial services and payments capabilities to consumers across the full spectrum of uses, geographies and mobile environments from basic services on simple handsets to more advanced services for smart phone owners.
Privately held, Cape Town, South Africa-based Fundamo has more than 50 active mobile financial services deployments across more than 40 countries, including 27 countries in Africa, Asia and the Middle East. The platform, which claims some 5 million registered subscribers - offers person-to-person payment, airtime top-up, bill payment and branchless banking services.
Joseph Saunders, Visa chairman and chief executive officer comments: "Combining Visa's unparalleled network scale, global reach, extensive product suite and established financial institution relationships with Fundamo's expertise in delivering mobile financial services in developing economies presents us with an important long-term opportunity to grow our business and drive financial inclusion in key geographic markets,"
For developed economies, Visa says a key focus of its new commercial agreement with Monitise is the introduction of new mobile services to existing Visa account holders outside the US to meet consumers' daily needs including mobile top-up, utility payments, and transit ticketing.
In addition, the two companies will launch a full suite of mobile banking services - including P2P payments, SMS alerts and loyalty offers - in the US for clients of Visa's debit and prepaid processing platform.
Visa acquired a 14.4% stake in Monitise in 2009 and the pair struck a strategic development deal in February.
Monitise says the new five-year alliance represents minimum annualised revenues in excess of $10 million in the first three years, with potential for greater revenues in years four and five as key milestones are achieved.