Visa pays €2bln to push mobile payments

Visa has just announced it has spent to €2 billion dollars to “position Visa to lead in mobile e-commerce“. And that’s coming straight from Joseph Saunders, Visa CEO. This €2 bln blow-out has bought them a company called CyberSource – an e-payment and security expert that is used by over 20,000 businesses.

What’s the story?

CyberSource powers online payments and fights fraud – that’s its business. According the company, 25% of all electronic money transactions in America are powered by its systems. It has been working with Visa since 1999, mostly around fraud management and security.

Visa has been very forthright in its reasons for buying CyberSource. It wants to push the growth of eCommerce, especially when it comes to use of Visa for online buying. CyberSource also has a lot of existing merchant relationships that Visa can now take advantage of, along with the “fraud management” services they’ve both worked on.

What we think?

Mobile payments are coming. Some of them are already here, but the big roll outs are starting to happen – like MoneyGrams announcement of a 40,000 vendor launch in the States yesterday. This announcement by Visa is just another indication of how big this will eventually be.

However, for the moment CyberSource’s assets are almost entirely USA-bound, which is something that Visa wants to address. The technology used and developed by CyberSource is to be pushed globally by Visa. After all; the farther afield CyberSource is, the farther afield Visa can power mobile and eCommerce.