Visa Trying To Pick A Mobile Winner?
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6 July 2009
Last week, Visa announced an alliance with Monitise plc, a major player in the mobile banking & payments space. This announcement was significant given that the mobile banking & payments space is very hot these days, and continues to be billed as "the next big thing" in payments. From Visa's perspective, Monitise's allure likely came from its implementation track record (Monitise's solutions are being used by hundred of banks) and international scope (Monitise operates in the US & the UK, with projects in the works elsewhere). With this, Visa basically gave a very weighty blessing of Monitise's solution, which will undoubtedly gain the attention of Visa's card-issuing financial institutions. As if the alliance wasn't already enough of an endorsement, Visa simultaneously announced that it intended to make a minority share investment in Monitise. This move was extremely rare for Visa, which usually relies upon market forces to come up with the best card-enabling technologies. It would seem that Visa is not shying away from trying to make a mark in this area of considerable industry attention. The alliance and investment raise a few key questions: 1. What kind of “macro SLAs” will Visa make Monitise put in place? E.g., what kind of functionality has to be available? When? Ready for what counties? 2. How will this influence/suppress the efforts of Monitise's mobile banking & payments competitors (such as ClairMail, Fidelity, Firethorn, First Data, Fundamo, M-Com, MShift, Sybase, etc.), who themselves may need to directly or indirectly work with Visa? 3. Is this a precursor to an enventual majority holding or even acquisition?