LIVE FROM GSMA MOBILE ASIA CONGRESS 2011: Payment company Visa has announced a mobile banking service for developing markets that provides access to pre-paid Visa accounts using SMS technology.
The payment service is based on technology from Visa-owned Fundamo, which provides technology for closed-loop mobile payment systems already in operation. The technology allows users to send and receive cash on their mobile phones without the need for a bank account or internet access. It can also be used to pay bills and money into bank accounts, while employers can pay their staff using the system.
What the Visa technology adds (that other mobile payment services in developing markets aren’t able to do) is that it will be interoperable across different mobile networks. It can also be used for e-commerce transactions, because online payment systems recgonise the Visa platform. Operator group MTN plans to make the service available in Uganda in early 2012, before extending it to Nigeria.
“We realised that there is real value in the electronification of money for the under-banked and the unbanked but because [existing systems] are led by operators and are closed loops, they have limited functionality in terms of the types of payments [and] they don’t really cross operators,” said Visa’s global head of mobile, Bill Gajda.
He added that the new service is able to be more secure than existing systems as it incorporates the Visa fraud scoring and authentication tools used in more developed markets.
Although Visa has mobile payment technology elsewhere, this is the first time it has addressed the developing world. “This is really our first emerging market product that’s really focused on banking the unbanked,” Gajda said.