Visa Nails Down Two More Mobile Payment Deals; Buys Fundamo for $110 Million

Global payment giant Visa consolidates its position in mobile payment market with the acquisition of South African firm Fundamo for a staggering $110 million. Visa has also reiterated an agreement with Monitise, to help existing Visa accounts on mobile devices and offer Visa account holders a new way to make payments. According to Visa, the deals will accelerate the company’s recently-announced strategy to “provide the next generation of payment solutions”. With Fundamo and partnership with Monitise, Visa is envisioned to deliver mobile financial services and payment capabilities to the users across the globe. Fundamo is a South African based firm, privately held by a group of investors that included Sanlam, Remgro and HBD Venture capital. Fundamo has deployed its mobile-based payment solutions in more than 40 countries in Africa, Asia and the Middle East. The company has a base of more than 5-million registered subscribers and the potential to reach more than 180-million consumers with mobile financial services. The acquisition will bring together Fundamo’s mobile payment service platform for customers with little to no access to a bank with Visa’s payment network worldwide. The current CEO of Fundamo, Hannes van Rensburg and the management team will continue to manage current and future implements. Van Rensburg said in a statement; Mobile network operators and financial institutions will now be able to take advantage of Fundamo's trusted mobile financial services platform backed by Visa's high standards for security, reliability and scale. According to Bill Gajda, Visa’s Head of Global Mobile Product, a complete global survey was conducted and before buying Fundamo four or five companies were considered in developed and emerging markets. Visa will utilize Fundamo’s flexible mobile payment platform to target a large proportion of world’s population that have mobile phones, but no bank accouts. Gajda said; Visa has been investing significantly in the mobile payment market for five years, but wanted to move strongly into emerging markets, says Gajda. The buyout is a step change for Visa. The company has gained “incredible” new capabilities that will expand its presence over the mobile phone in emerging markets, which are some of the highest growth markets in the world. Visa's target market is the prepaid segment, which accounts for nine out of every 10 people with a cellphone. Fundamo's platform is flexible and can be integrated into any operator or banking system, which was part of the company's appeal. There are two billion people in the world that have mobile phones, but aren't banked, and that number is “growing every day” as a thousand new subscribers sign up each minute. Neil Strother (WA.-based mobile practice director at ABI Research), said; Visa partnering with Fundamo and Monitise is a sign that they’re being aggressive with their strategy on mobile banking and devices. All financial payment companies are chasing the mobile trend, and companies are making quick decisions about the industry right now. It’s clear, however, that Visa is on the right track to making themselves a presence in the industry with this new merger. Visa definitely is taking initiatives with their mobile banking plan, but they also have some heavy competition. Visa is currently not part of Google Wallet therefore; they are working to generate as much support as possible to go up against the giant. Purchase of Fundamo will help Visa capture developing nations across Latin America, Asia and Africa in delivering mobile financial services. Further, Visa has also reaffirmed a 5-year deal with UK-based firm Monitise. The agreement introduces new mobile services – such as mobile and person-to-person payments, mobile transaction alerts and mobile marketing offers -- to Visa’s existing account holders both in the US and outside. Neil Strother (WA.-based mobile practice director at ABI Research), said; Visa partnering with Fundamo and Monitise is a sign that they’re being aggressive with their strategy on mobile banking and devices. All financial payment companies are chasing the mobile trend, and companies are making quick decisions about the industry right now. It’s clear, however, that Visa is on the right track to making themselves a presence in the industry with this new merger. Visa definitely is taking initiatives with their mobile banking plan, but they also have some heavy competition.

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Visa Nails Down Two More Mobile Payment Deals; Buys Fundamo for $110 Million

Bilal Hameed

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