Visa will pay approximately $110 million (Rs 500 Crore approximately) in cash. The acquisition will slightly dilutive to Visa’s earnings per share in its fiscal year 2011 ending September 30, 2011.
Visa, a global leader in payments, last week announced that it is acquiring Fundamo, a leading platform provider of mobile financial services for mobile network operators and financial institutions in developing economies.
The investment is expected to accelerate the execution of Visa’s global strategy announced last month to provide the next generation of payments solutions, enabling consumers to transact wherever and whenever they choose, using a card, a computer or a mobile device with Visa’s reliability, security and global acceptance.
While mobile financial services in developing markets is growing and has become a core service offered by many mobile operators and financial institutions, these services are often limited in scalability and reach and are not interoperable with other regional payment services or global payments networks.
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. Fundamo’s deployments currently have a base of more than five million registered subscribers and the potential to reach more than 180 million consumers with mobile financial services. Mobile prepaid payments provide affordable, convenient and secure transaction capabilities that are transformational to the lives of merchants and consumers in those regions.