Visa launches mobile prepaid product for Africa

By EILEEN AJ CONNELLY

NEW YORK

Visa Inc. on Thursday launched a mobile prepaid product aimed at consumers in developing countries who don't have bank accounts.

The payments processor said it is in a deal with MTN Group Ltd, one of the largest telecommunications providers in Africa, to offer the product to its subscribers.

The product allows individuals to use any type of mobile phone -- not just smartphones -- to transfer money using text messaging.

Many telecom companies in developing countries offer their customers the ability to move money within their network. The technology developed by Visa's recent acquisition Fundamo, however, will now allow for transfers across different networks.

That's a significant step toward further enabling money to be moved electronically in communities that frequently do not have financial institutions, Visa President John Partridge said.

The service is intended to be convenient for people living in remote locations, Partridge said. Mobile network operators have agents throughout developing countries who can essentially act as branchless banks, allowing consumers to add cash to their accounts. Those accounts may then be used for purchases and for transferring money to others, a key service in communities where family members often work in distant locations and send their earnings back home.

Partridge said the technology will allow for international transfers as well.

The service will be offered first by MTN in Nigeria, Rwanda and Uganda. The South Africa-based company operates in 21 countries on three continents and claims about 142 million subscribers.

Visa said it expects to expand the product to other countries in Africa, Asia and Latin America. The product is one of several steps the San Francisco-based company is taking as part of an effort to expand its international revenue base.

Visa shares slipped $2, or 2.1 percent, to close Thursday trading at $91.40.