The prepaid Visa account can be used by account holders to send funds to each other, send and receive international remittances, make purchases at merchants or online, or withdraw funds from a Visa cash machine.
Visa said that is was created to serve the needs of “unbanked and under-banked consumers” who have mobile phones. Developing countries in Africa, Asia and Latin America will be the first markets to be targeted with the new product.
“The trend in emerging markets is that mobile phone penetration will be higher than bank penetration… Consumers are far more likely to have a mobile phone than a bank account.” Brad Jones, Director for Mobile Money, Visa
The payment system makes use of USSD (Unstructured Supplementary Service Data) technology, which can be accessed on low-cost handsets, according to Brad Jones, Visa’s director for mobile money. The technology comes from the Visa’s acquisition earlier this year of Fundamo, a South African vendor of a mobile financial services platform for financial institutions and mobile operators.
Users at ATMs or aiming to make transactions online will have to enter combinations of the mobile number linked to their account, an identification number, and a CVV (card verification value) code issued to them, Jones said.
MTN Group, a telecomms provider in Africa and the Middle East, expects to offer the new Visa service to MTN MobileMoney customers across its markets. Initially it will be available in Nigeria and Uganda.
Mobile payment services are a large opportunity both for banks trying to extend their reach, and mobile operators trying to boost revenue, according to analysts.