Visa Inc. continues to focus its attention on the growing mobile payments market. Just a month after unveiling its new global mobile strategy, the San Francisco-based payment giant announced it is acquiring mobile financial services company Fundamo and expanding its relationship with mobile money company Monitise plc.
In the announcement of the new investments, Visa said it is pursuing the acquisition and partnership because it wants to not only expand its mobile payment services, but also move more quickly in executing its global mobile strategy.
In a post on Visa's official blog, Bill Gajda, head of mobile products, said, "(Fundamo and Monitise) play important roles in extending electronic payments and services via mobile devices." He added that together the companies will "accelerate Visa's ability to bring financial services to banked and unbanked consumers worldwide."
"This means that consumers — across the full spectrum of uses, geographies and mobile environments — can access basic financial services on a simple handset or more advanced services on a smartphone," Gajda said.
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Reaching the global unbanked
Fundamo, based in Cape Town, South Africa, provides mobile financial services in 40 countries, with a focus on Africa, Asia and the Middle East. Its services, such as person-to-person payments, bill payment and branchless banking, are aimed at the unbanked and underbanked, a key market for Visa’s global mobile strategy. The announcement said Fundamo currently has more than 5 million subscribers with the potential to reach more than 180 million consumers.
"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," Joseph W. Saunders, chairman and CEO of Visa, said in the announcement.
Visa is paying $110 million in cash to acquire Fundamo.
Expanding mobile financial services to account holders
Along with the Fundamo acquisition, Visa announced it has inked a new agreement with Monitise, a provider of mobile money and mobile financial services. Visa is looking to Monitise to help it expand mobile financial services to its banked account holders through banking partners, including mobile top-up, bill payment and transit ticketing.
The companies will also be introducing a range of services that Visa payment processing partners can then offer to their customers, such as person-to-person payments, mobile marketing offers and mobile transaction alerts.
"Mobile money is an industry that will have a big societal impact as the 5-plus billion mobile phone users around the world discover new ways to bank, pay, trade and shop," Monitise CEO Alastair Lukies said in a separate announcement. "This agreement validates Monitise's strategy of becoming the leading trusted enabler in the space and cements our role in this ever growing ecosystem."
Monitise said the new agreement with Visa represents approximately $10 million in new revenue for the company in the first three years of the partnership. Additional revenues in years four and five will be dependent upon the company hitting certain milestones.