Monitise Lands MasterCard Partnership/Investment, Overhauls Business Model (March 25, 2014)
MasterCard is working with U.K.-based Monitise plc to develop and deploy mobile wallets and digital payments around the globe. As part of the deal, MasterCard will make a minority investment in Monitise, as part of an overall £109 million (US$180 million) share placing.
Monitise will use the new funds to overhaul its business model, moving away from charging licensing fees to its financial institution clients in favor of a subscription model that will result in a long-term revenue stream, while cutting upfront costs for clients, according to the company. Monitise hopes to grow its base of registered users from 28 million to 200 million over the next four years.
“[Monitise] is now embarking on a new chapter in mobile money innovation as it accelerates its move to a subscription-based business model,” said Alastair Lukies, CEO, Monitise. “By adopting this approach, the [company is] looking to ensure that its secure platform technology is accessible to the widest possible number of people.” Monitise cautioned that the move to the new model likely will result in a short-term slowdown in revenue and cut its projected growth for 2014 from 50 percent to 40 percent, while warning of higher losses in the second half of the year.
Monitise already counts Visa Europe among its existing investors and is a strategic partner of U.S.-based Visa Inc. The London-headquartered company works with more than 350 FIs, merchants and payment processors, and annually processes 3.5 billion transactions over its payment platforms, worth a total of more than $70 billion. Last month, Monitise acquired Istanbul’s Pozitron Yazilim in a $32 million deal to bolster its mobile money capabilities.