Monitise to buy Clairmail for $173 million

26 March 2012

Clairmail, the North American mobile banking and payments software provider that has been seeking to expand in Europe, is to be bought by rival mobile money vendor Monitise for US$173 million. The agreed acquisition is subject to regulatory and shareholder approvals.

The combined entity will have 13 million registered consumers across four continents and should be a good strategic fit, combining Monitise’s UK and European customers with Clairmail’s US presence. The two company’s process billions of transactions a year and the mobile money vendors claim that, on an annualised basis, approximately $10 billion worth of payments and transfers go across their software systems each week.

If the agreed US$173 million takeover goes ahead Pete Daffern, the current head of Clairmail, will remain in his position and join the group executive board of Monitise. “Both companies have incredible synergy and are dedicated to offering bank-grade services that empower consumers to bank, pay and shop across any mobile device,” he said. “I could not be more proud of the Clairmail team and its accomplishments since founding in 2004, and look forward to working with the seasoned team behind Monitise to continue innovating and pushing the boundaries of mobile banking, payments and commerce worldwide.”

According to Alastair Lukies, chief executive of the Monitise Group, “the deal is transformational for our customers, our team, our shareholders and our company. It is a compelling combination and great news for all those wanting to offer bank-grade mobile money services to billions of consumers.”

“Clairmail shares our customer-centric approach,” he added, “and dedication to bringing the best possible mobile experience and technology to customers through constant innovation and a focus on delivering bank-grade mobile services.”

New analysis

The combined entity would have eight of the top 13 US financial institutions as customers and many smaller credit unions and other banks, giving Monitise greater reach in the North American market and access to Clairmail’s established sales team. Monitise has good European coverage thanks to its long established position in the region and has global strategic partnerships with Visa Inc and Visa Europe, which is a stakeholder in the firm, and with FIS.

The suite of Clairmail products will be maintained and enhanced with both companies enriching each other’s mobile offerings, said the partners, which also claimed that new and existing customers will benefit from a more balanced and complimentary deployment model for on-premise and hosted mobile banking, payment and commerce products. Aside from the obvious synergies, the fact that Clairmail recently signed an agreement to provide its mobile payments software to VocaLink as part of the payment processors’ new peer-to-peer (P2P) mobile payments platform in the UK, must also have been part of the rationale behind the deal.

Monitise originally grew out of VocaLink’s ATM network over a decade ago and must have been keen to protect its position in its ‘home’ market and get in on this new deal, which will allow bank and building society customers in the UK to transfer money to each other using only their mobile phone numbers. The P2P mobile payments service, due to be rolled out later this year, relies on VocaLink’s existing Faster Payments Service (FPS) shared network infrastructure in the UK. It should go a long way to popularising mobile payments in the UK because all the necessary bank account numbers and identifier codes are back-ended, meaning all the consumer needs is their friend’s mobile phone number to move money around.

• For other recent developments in the mobile payments and financial services arena please see our recent Mobile World Congress show report.

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