Visa to acquire PlaySpan

Visa has announced an agreement to acquire PlaySpan, a privately held company with a payments platform that handles transactions for digital goods in online games, digital media and social networks around the world.

Visa will pay approximately $190 million in cash, plus additional consideration for performance milestones.

The acquisition is expected to be completed in Visa’s fiscal second quarter 2011, pending satisfaction of customary closing conditions including regulatory approvals.

Acquiring PlaySpan is expected to be slightly dilutive to Visa’s earnings per share in its fiscal year 2011 ending September 30, 2011.

Within the e-commerce category, PlaySpan is a leader in the relatively new segment of digital goods, which generated an estimated $25 billion in consumer spending globally in 2010, a figure expected to reach $280 billion by 20143.

The acquisition of PlaySpan complements Visa’s 2010 CyberSource acquisition and extends the company’s capabilities into one of the fastest growing segments of e-commerce, digital and mobile commerce.

PlaySpan provides a Monetization-as-a-Service platform that allows merchants to monetise their content using a broad suite of payment and commerce-related solutions in fraud and risk management, analytics, merchandising and global payment connectivity.

Merchants use PlaySpan’s technology to enable their consumers to make safe and convenient purchases online for items such as game credits, premium memberships and digital goods.

Last year, global e-commerce sales reached an estimated $948 billion according to JP Morgan, and they remain a significant growth opportunity for Visa. Approximately 45% of US online spend takes place on Visa’s network, stated comScore in its Q4 2010. For Visa’s fiscal first quarter 2011, the company reported 25% year on year growth in e-commerce payment volumes globally.

PlaySpan is backed by top-tier venture funds including Easton Capital, Menlo Ventures, Novel TMT Ventures, STIC Investments, Silicon Valley Bank Capital, Softbank China & India, TimeWarner Investments, Vodafone Ventures and GE Asset Management.