MADRID: Santander a Spain’s Banco has bought a 5 percent stake in mobile banking business of Monitise that values the company at $1 billion and shows the increasing focus banks are putting on mobile payments.
In Europe in the last two years Mobile banking has boomed with a rush in transactions on tablets taking many lenders by surprise, prompting them to shift strategies and put more investment and focus on improving technology.
On Thursday Santander said it would pay 33 million pounds for 5.1 percent of Monitise, valuing the UK firm at 647 million pounds ($1 billion). Shares in Monitise jumped 11.5 percent.
Further Santander said the investment would accelerate Monitise’s new technology platform and also help it develop its own technology.
In another statement Monitise, which is used by banks, retailers and mobile operators for payments, Spanish telecoms firm Telefonica and credit card company MasterCard would also invest 16 million pounds in it. Telefonica is buying 2 percent of the company, and MasterCard is buying 0.5 percent.
Monitise co-CEO Alastair Lukies said the mobile money industry is now a global phenomenon. In developed markets it is fundamentally changing the way we bank, pay and buy. In emerging markets it is the foundation of new economic systems.