How Fiserv's deal for Monitise gives it valuable footing in Europe
This morning it was announced that Fiserv is to acquire UK mobile payments veteran Monitise for 70 million pounds ($88.72 million). This is quite a bargain considering that at its peak, Monitise was valued at around 2 billion pounds.
But beyond the firesale price tag, what exactly does Fiserv get out of this?
European expertise. Monitise launched in 2003, back when phones were far from smart. As mobile banking gained momentum, many of its U.S. peers such as Firethorn and mFoundry were acquired. Monitise, however, maintained ownership despite market changes which eventually moved against it with the launch of services such as Apple Pay and Android Pay.
It would be fair to say that Monitise and its team have considerable experience and a well developed sense of what works and what does not work in the European digital payment landscape. For U.S.-based Fiserv, the specific local knowledge of European banking idiosyncrasies could provide a stable launchpad for expansion in the region.
A diverse suite of products. Despite divesting of assets and people to keep the lights on, Monitise has built and maintained a suite of complementary products that go beyond mobile banking and payments for the EMEA region.
Recently, Monitise brought FINkit to market, a cloud-native business combining four key capabilities that enable banks to build their own fintech solutions. Monitise describes it as: “A unique platform and toolkit providing a modern application development and operations environment built from the ground up for bank grade security, compliance and performance."
Through the purchase, Fiserv now also owns Big Radical (formerly Monitise Create), a product development studio of designers, engineers, project coaches and business innovators based in Soho, London; and Monitise Content, a platform that connects consumers with retailer offers and promotions. The portfolio also extends to operations serving consumers in territories including the U.S., Germany, Australia and France, and also enables digital ticketing through Nectar and EE.
Pendulum swinging. The timing of the acquisition may be impeccable for Fiserv. Monitise weathered the trend of mobile payments shifting from FIs to third party digital wallets from Apple and Google.
Today, FIs are less enamoured with the lack of brand control and transaction fees for using these solutions. Instead, banks and credit unions want to enhance their own mobile banking apps to provide greater versatility and stickiness with expansion into services such as P-to-P payments. Fiserv could capitalize on this seachange.
What do you think? Senior Analyst Nick Holland welcomes your feedback in the comments below or at email@example.com