VeriFone Holdings Inc. has purchased an 8.6% stake in Trunkbow International Holdings Ltd. and has become a co-lead investor in the reverse-merger financing for the China-based mobile-payments company, the San Jose, Calif.-based point-of-sale terminal announced today. With reverse-merger financing, private companies acquire a public company.
VeriFone invested $5 million of the approximately $22.5 million the company raised through its financing agreement.
Founded in 2001, Trunkbow provides technology that enables Chinese telecommunication service providers to offer mobile applications to their subscribers. The company in 2009 began offering a mobile-payment platform throughout the Chinese province of Shandong with an undisclosed China telco. It plans similar deployments throughout multiple provinces.
Trunkbow and its telco partners expect to deploy roughly 125,000 mobile-payment terminals within three years. “The size of the China mobile-phone market presents an attractive opportunity for the implementation of mobile payment,” says a VeriFone spokesperson.
The terminal maker decided to invest in Trunkbow because of its history of deploying mobile-based products and services, he says. “As mobile phones have become more ubiquitous, mobile payment is a natural extension,” says the spokesperson. “Countries such as Japan and Korea have already rolled out mobile payments for a number of years, and China is looking to follow.”
Trunkbow has named VeriFone its preferred supplier of payment-terminal technology, and Albert Lui, VeriFone senior vice president and general counsel, has joined Tunkbow’s board of directors.
VeriFone employs more than 80 professionals in China and is the largest provider of payment systems in the country, according to the company.
