Philippine Long Distance Telephone, Rocket Internet In Mobile Payment Services Joint Venture

   By Cris Larano 
 

MANILA--Philippine Long Distance Telephone Co. (TEL.PH) said Tuesday it formed a joint venture with its Frankfurt-listed affiliate Rocket Internet AG for an online and mobile payment services firm that will focus on emerging markets.

PLDT will contribute to the joint venture its mobile-first payment platform Smart e-Money Inc., a mobile banking and mobile wallet services, while Rocket will contribute its participation in Paymill Holding GmbH and Payleven Holding GmbH, two payment platforms for small and medium-sized e-commerce business in Europe. Smart e-Money has more than 5 million customers and 300,000 trade accounts, and handled around $4 billion in transactions in 2013.

PLDT will own 50% of the joint venture. The deal is expected to close within the first quarter.

PLDT spokesman Ramon Isberto said the target of the joint venture is emerging markets in Latin America and Africa as well as India where Rocket already has a presence, but its growth is hampered by the absence of a platform that allows the so-called "uncarded and unbanked" to participate in online transactions.

He pointed out that Smart e-Money has been in existence for more than a decade and has been providing banking services to customers with mobile phones but no bank accounts since 2000. "But we had no means to bring this services to other markets until Rocket came along," he added.

A McKinsey & Co. report in 2012 has cited Smart e-Money among the handful of mobile-money deployments in the world to have reached sustainable scale our of the more than 100.

According to the 2013 report of global group GSM Association, there were more than 203 million registered mobile money accounts worldwide as of June that year, with 98 million in Sub-Saharan Africa. Only a third of all those accounts, however, had been used between in June, when total global transactions reached an estimated $7.4 billion.

Write to Cris Larano at [e-mail]; @CrisLaranoWSJ

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