LONDON (Reuters) - Spain’s Banco Santander has bought a 5 percent stake in mobile banking business Monitise that values the company at $1 billion and shows the increasing focus banks are putting on mobile payments.
Mobile banking has boomed in Europe in the last two years, with a surge in transactions on tablets taking many lenders by surprise, prompting them to shift strategies and put more investment and focus on improving technology.
Santander said on Thursday it would pay 33 million pounds for 5.1 percent of Monitise, valuing the UK firm at 647 million pounds ($1 billion). Shares in Monitise jumped 11.5 percent.
Santander said the investment would accelerate Monitise’s new technology platform and also help it develop its own technology.
Monitise, which is used by banks, retailers and mobile operators for payments, said Spanish telecoms firm Telefonica and credit card company MasterCard would also invest 16 million pounds in it. Telefonica is buying 2 percent of the company, and MasterCard is buying 0.5 percent.
“The mobile money industry is now a global phenomenon. In developed markets it is fundamentally changing the way we bank, pay and buy. In emerging markets it is the foundation of new economic systems,” said Monitise co-CEO Alastair Lukies.
Reporting by Steve Slater; Editing by Pravin Char