Visa to Form JV in India – Analyst Blog

In an attempt to further penetrate into the Indian consumer market, on Wednesday, Visa Inc. (V) announced its partnership with London-based Monitise plc to offer an array of mobile financial services in India through a joint venture (JV) operation. The JV is expected to reach fruition by June 2010.

 

Accordingly, Visa plans to build up an efficient technology platform through the financial service providers in India in order to speed up and deliver well-organized mobile banking services such as bill payment, banking, mass transit ticketing, mobile top-up and others.

 

This is not the first such attempt by Visa. Over the past two years, the company has prudently allied with various financial institutions, mobile network operators and technology providers in order to smoothen and commercialize the mobile banking services for an enhanced consumer-base across the globe.

 

Through such partnerships, Visa seeks the potential to pool in more than a billion mobile consumers into its financial stream, particularly those who did not use the mobile financial services previously. Based on this approach, Visa together with Monitise is looking forward to tap India, which is the second largest mobile market in the world. As of March 31, 2010, India had an estimated 584 million mobile phone subscriptions, thereby providing scope for extensive growth opportunities.

 

Moreover, the partnership furthers Visa’s expansion strategies as Monitise has already been successfully delivering secure mobile banking and payment services to over 2 million registered users through more than 200 banks and financial institutions across the U.K. and the U.S. Hence, the JV with Monitise will augment Visa’s growth opportunities and will also enable a vast acceptance of the digital currency in India.

 

This process is also expected to result in a shift of about $700 billion of consumer spending from cash to electronic modes of payment. Overall, we believe that the Visa−Monitise JV will be potent enough to take the mobile banking services a step further, thereby expanding payment volumes by providing a user-friendly and secure technology to its subscribers.