Payment services company Visa has announced a news mobile banking product for the developing markets providing access to pre-paid Visa accounts using SMS technology.
The payment service is based on technology from the company recently acquired by Visa, Fundamo, which provides technology for closed-loop mobile payment systems. The technology allows users to send and receive cash on their mobile phones without the need for a bank account or internet access. The system can also be used to pay bills and deposit money into bank accounts or pay salaries.
Visa is trying to add a technology which they say is independent of networks. It is not clear how much interest the system will attract since it is being marketed by MTN which is considered a competition by other operators in countries like South Africa, Uganda and Rwanda. The system can also be used for e-commerce transactions, because online payment systems recognise the Visa platform.
Already Uganda’s mobile operator MTN plans to make the service available in the country by early 2012 before later extending to Nigeria. MTN Mobile Money has been implemented in 12 countries. At 30 September 2011, there were 5.7 million registered mobile money customers.
“We realised that there is real value in the electronification of money for the under-banked and the un-banked 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.
In Kenya, M-Pesa is such a key service to Safaricom that it would just be unimaginable seeing the network encourage clients to use the new system introduced by Visa. Safaricom also has an a partnership between it, I&M and Visa where they offer a pre-paid debit card linked to M-Pesa system. The Visa debit card has become very popular with users all over Kenya who love to shop online.
Airtel also entered an agreement with MasterCard to offer limited duration pre-paid virtual debit cards to those who want to shop online.
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