Business: Visa makes moves into mobile banking

SAN FRANCISCO (AP) -- Visa Inc. announced two moves on Thursday into mobile banking, buying a company that makes software for mobile banking for users in Africa, Asia and the Middle East, and striking an agreement with another company that works with bank customers.

Visa said it would pay $110 million in cash for privately-held Fundamo, based in Cape Town, South Africa. Fundamo now has more than 5 million subscribers, and Visa said it has the potential to reach more than 180 million customers. Visa expects to complete the deal on Thursday and said it will slightly hurt its earnings for the fiscal year that ends Sept. 30.

Mobile banking is a key growth area for Visa both in established countries, as bank customers look for more convenience, and in the developing world, where many people either don't use banks at all, or use them only through a mobile device. But getting different mobile carriers and bank payment systems to talk to each other can be difficult. Fundamo's software is supposed to bridge those gaps, Visa said. It allows for person-to-person payments, adding cell phone minutes, bill paying, as well as banking services, Visa said.

Visa also announced an agreement with mobile banking software maker Monitise PLC. Visa said the deal will expand delivery of mobile financial services to Visa account holders through banks. Monitise software will allow Visa to make existing accounts available on mobile phones. It also allows Visa account holders outside the U.S. to make electronic payments, buy phone minutes and obtain transit tickets.

Visa said it also plans to use Monitise to make it possible for U.S. financial institution customers to expand mobile banking to customers with debit and prepaid cards.

Published: Fri, Jun 10, 2011