FIS buys remaining stake in mFoundry for $120 million

Thus begins consolidation in the growing mobile payments and banking sector.



It was only a matter of time before the biggest players in financial services would scoop up one or more startup companies pushing mobile payments technologies.

FIS -- that's short for Fidelity National Information Services -- is not a name you ought to be familiar with. But its technology you've no doubt used before. The Jacksonville, Fla.-based company is the world's largest provider of banking and payments technology, and is among a select few companies responsible for core banking functions around the world.

If your bank makes transactions with another in a nework, FIS or its peers are there to help it along.

FIS on Thursday announced that it would acquire the remaining 78 percent interest in mFoundry, the nine-year-old mobile payments company based in Larkspur, Calif., for $120 million in cash.

The plan is simple: FIS wants an even larger footprint in mobile banking, a rapidly growing channel for money exchange. With 850 customers -- Bank of America and PNC Bank among the largely North American group -- mFoundry should help in this regard. 

Banking isn't the only use case mFoundry's software-as-a-service technology serves, though it's a key one. The company also addresses mobile retail (and the loyalty programs that go with it) and various other services, from basic bill paying to gift card-giving to providing insurance quotes or credit scores. It's quite a bit of data; scaled to FIS' magnitude, it's a tremendous database for learning and leveraging how people interact with financial data.

In October, mFoundry took the wraps off the latest generation of its mobile banking platform, Fin.X; at the time, it said it can grow per-user revenue up to 40 percent and provides up to $100 of incremental per-user revenue each year.

With mobile banking usage predicted to triple in the next five years -- almost half of U.S. bank account holders will use mobile banking by 2017, Forrester predicts -- there is a lot of potential hidden in people's pockets. FIS hopes it can get ahead.


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