Visa buys mobile-focused Fundamo for $110m, signs comercial deal with Monitise
Visa (NYSE:V), the world's largest credit and debit processor, said on Thursday that it has purchased South African-based mobile financial services firm Fundamo for $110 million in cash, and also announced the company has struck a long-term commercial deal with Monitise (LON:MONI), a provider of financial services for institutions.
"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," said chairman and CEO of Visa, Joseph W. Saunders.
The cash-transaction is expected to wrap up today. Visa said the acquisition would slightly dilute its earnings per share in the year ending Sept 30, 2011.
The deal is in line with Visa's strategy to provide payment services in developing markets to customers, either using a card or mobile device, Visa said.
Mobile financial services are often limited in scalability and reach and are not inter-operable with other regional or global payment services, but Fundamo's platform would close this gap, providing person-to-person payment, airtime top-up, bill payment and branchless banking services.
Fundamo, a privately-held company, has more than 50 active mobile financial services across more than 40 countries, which include 27 countries in Africa, Asia and the Middle-East. Currently, the company has five million subscribers with the potential to reach an extra 180 million consumers with mobile financial services.
Visa also said today that it signed a commercial contract with Monitise to expand its mobile financial services to banked and un-banked Visa account holders.
Monitise's platform will allow Visa account holders outside the U.S. to make utility payments, buy phone minutes and transit ticketing through their mobiles.
In addition, Monitise and Visa plan to launch mobile banking services in the U.S. like mobile payments, mobile transaction alerts and mobile marketing offers. Monitise shares were up 5.98% to trade at $27.82 on Thursday as of 10:40 a.m. EST.
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