LONDON, Nov 27 (Reuters) - Spain's Banco Santander has bought a 5 percent stake in mobile banking business Monitisethat values the company at $1 billion and shows the increasingfocus banks are putting on mobile payments.
Mobile banking has boomed in Europe in the last two years,with a surge in transactions on tablets taking many lenders bysurprise, prompting them to shift strategies and put moreinvestment and focus on improving technology.
Santander said on Thursday it would pay 33 million poundsfor 5.1 percent of Monitise, valuing the UK firm at 647 millionpounds ($1 billion). Shares in Monitise jumped 11.5 percent.
Santander said the investment would accelerate Monitise'snew technology platform and also help it develop its owntechnology.
Monitise, which is used by banks, retailers and mobileoperators for payments, said Spanish telecoms firm Telefonica and credit card company MasterCard would also invest 16million pounds in it. Telefonica is buying 2 percent of thecompany, and MasterCard is buying 0.5 percent.
"The mobile money industry is now a global phenomenon. Indeveloped markets it is fundamentally changing the way we bank,pay and buy. In emerging markets it is the foundation of neweconomic systems," said Monitise co-CEO Alastair Lukies.
(1 US dollar = 0.6344 British pound) (Reporting by Steve Slater; Editing by Pravin Char)