Mastercard and MTN Group Fintech Partner to Drive Acceleration of Mobile Money Ecosystem in Africa Across 13 Markets

Rhea-AI Summary

Mastercard and MTN Group Fintech have partnered to launch a prepaid virtual card for MTN's MoMo customers, expanding access to digital payments across Africa. The collaboration aims to empower small businesses and consumers with secure mobile payment solutions, leveraging Mastercard's technology and MTN's extensive reach in 13 African markets.

Insights

Market Research Analyst

The strategic partnership between Mastercard and MTN Group Fintech signifies a transformative step in the financial landscape of Africa. The collaboration is poised to leverage Mastercard's technological prowess to augment MTN's fintech offerings, particularly in mobile money services. This move is likely to catalyze financial inclusion across the continent, where a significant portion of the population remains unbanked or underbanked.

From a market perspective, the integration of Mastercard's payment solutions with MTN's MoMo platform could potentially lead to an increase in transaction volumes and customer acquisition. This is due to the extended reach of over 100 million acceptance points globally, which promises greater convenience and accessibility for users. For investors, the key metrics to watch would be the growth rate in MoMo's active user base and the subsequent impact on MTN's revenue streams. Additionally, the cross-border remittance feature could attract a new user demographic, further diversifying MTN's income.

However, the success of this partnership hinges on the execution and uptake of services. Competing with existing financial institutions and overcoming infrastructural challenges will be critical for the anticipated growth. Monitoring the adoption rate post-launch will provide insights into the partnership's effectiveness in tapping into the unbanked population.

Financial Analyst

The investment by Mastercard into MTN Group Fintech is indicative of confidence in the growth potential of mobile financial services in Africa. This minority investment could be seen as a strategic move to secure a foothold in a market that is rapidly embracing digital financial solutions. The financial implications for both Mastercard and MTN Group could be substantial, as this partnership aligns with the global trend of digitalization and cashless economies.

For Mastercard, the deal expands its presence in a high-growth region, potentially driving up transaction processing volumes and strengthening its international diversification. For MTN, the collaboration with a global financial giant could enhance its brand credibility and attract additional investment. Shareholders of both companies may anticipate positive financial outcomes, assuming the partnership leads to increased market penetration and customer loyalty.

It is important to note that the partnership's success could also be influenced by regulatory environments in the respective African markets. Regulatory compliance and the ability to navigate the diverse financial landscapes will be crucial for the sustained growth and profitability of this venture.

Economist

The partnership between Mastercard and MTN Group Fintech represents a significant economic development for Africa, with the potential to drive financial inclusion and economic growth. By providing mobile money solutions to millions, including small and medium-sized enterprises (SMEs), the initiative could stimulate economic activity by facilitating smoother transactions and broadening access to financial services.

Increased financial inclusion through mobile platforms can lead to greater consumer spending, savings and investment, which are critical components of economic development. Furthermore, the ability for SMEs to access affordable credit and secure digital tools can enhance productivity and competitiveness, potentially leading to job creation and poverty reduction. The long-term economic impact could be transformative, particularly in regions where traditional banking infrastructure is limited.

However, the broader economic benefits will depend on the extent to which these digital financial services are adopted and the degree to which they can integrate with existing financial ecosystems. The overall success will also be contingent on the stability and security of the mobile platforms, which are essential to gain and maintain the trust of consumers and merchants alike.

• The partnership is set to launch a prepaid virtual card tailored for MTN's MoMo customers, granting them access to over 100 million acceptance points worldwide
• Additionally, it will empower MoMo merchants to seamlessly accept card payments, enhancing the platform's instant cross-border money remittance services and capabilities

BARCELONA, Spain--(BUSINESS WIRE)-- Mastercard and MTN Group Fintech have signed a multi-market agreement that will set in motion a new era of collaboration to connect millions of people and small businesses across Africa with digital tools to transact through secure mobile payments, expanding access to the benefits of the cashless digital economy.

Serigne Dioum, Group CEO, MTN Fintech and Amnah Ajmal, Executive Vice President, Market Development, EEMEA at Mastercard (Photo: AETOSWire)

The partnership will use Mastercard’s cutting edge technology and capabilities to support MTN’s ambition to become Africa’s largest fintech platform for both merchants and consumers. This follows Mastercard and MTN’s recent agreement for a minority investment into MTN Group Fintech - the digital financial services arm of Africa’s largest mobile network operator – that concluded this month.

With MTN's overall subscriber base at 290 million and 60 million active monthly MoMo (Mobile Money) wallets, the agreement will impact 13 markets in Africa including Benin, Cameroon, Cote d’Ivoire, Eswatini, Ghana, Liberia, Nigeria, Republic of Congo, Republic of Guinea, Rwanda, South Africa, Uganda, and Zambia.

“Our innovation strategy is based on collaboration. We are very proud of our partnership with MTN that will enable digital commerce for millions of people in Africa. In addition, mobile money solutions can be greatly beneficial for SMEs, enabling growth through seamless commercial operations, wider payments acceptance, access to affordable credit, and secure digital tools,” said Amnah Ajmal, Executive Vice President, Market Development EEMEA, Mastercard.

Africa is home to over 1.3 billion people and only about 43% are banked with over 90% of all payments and transactions made via cash. And of the total population, 45% have mobile money accounts. Over the past five years, Mastercard and MTN have joined together to support several mobile money programs across Africa, helping people to make payments through global platforms, thus bringing more people into the financial mainstream.

“When there is a mutual vision – in this case to bring access, progress, financial inclusion, and prosperity to people – the road to partnership is a simple one. We look forward to working with Mastercard as a partner that is also committed to the enablement of more people and businesses through the collaboration into best-in-class apps, superior user experiences, safe transactions, secure remittances, new use cases, and expanded acceptance,” said Serigne Dioum, Group CEO, MTN Fintech.

The collaboration will help strengthen local infrastructure for digital payments, support potential expansion of transactions in the future and drive financial inclusion through access to assets.

Enabling global access for MoMo wallet users

A virtual and physical Mastercard companion card will be added to every MoMo wallet allowing users access to over 100 million acceptance locations globally enabling MTN to scale up internationally.

With this access, Mastercard will also be able to provide its cybersecurity solutions to MTN’s operations with the aim to increase customer loyalty and trust.

Empowering SMEs with payment acceptance solutions

The agreement will enable SMEs with payments acceptance solutions such as Mastercard’s SME-in-a-Box, a low-cost payments solution that enables small business owners to move their businesses online and accept a range of digital payments from their customers.

SME owners will now be able to access solutions with the opportunity to set up an e-commerce shopfront, including QR enablement, Tap on Phone solutions and digital card acceptance. This aims to further elevate customer experience, reduce business costs, and open new avenues for growth and innovation.

Expanding reach for remittance solutions

Through the partnership, consumers will now have expanded reach for mobile money remittance services – both inward and cross-border remittances in Africa. The demand for international remittance services is growing with more than US$2 billion in daily processed transactions, equivalent to more than 40% of the GDP of Sub-Saharan Africa. International remittances via mobile-money wallets grew by 65% year over year in 2020 to around US$1 billion, with no signs of slowing.

Mastercard is committed to its work with multiple telecommunications network companies across the continent and around the world, to make financial inclusion a reality. The company has pledged to bring 1 billion people and 50 million SMEs into the global digital economy by 2025. The work to provide MTN’s consumers and SME customers with easy and secure solutions, platforms and tools is just one example of work to deliver on this goal.

About Mastercard (NYSE: MA) www.mastercard.com

Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.

About the MTN Group

Launched in 1994, the MTN Group is a leading emerging market operator with a clear vision to lead the delivery of a bold new digital world to our customers. We are inspired by our belief that everyone deserves the benefits of a modern connected life. The MTN Group is listed on the JSE Securities Exchange in South Africa under the share code ‘MTN’. Our strategy is Ambition 2025: Leading digital solutions for Africa’s progress.

About MTN Group Fintech

MTN Fintech, the platform business of MTN Group, is dedicated to revolutionizing global financial services through innovative digital technology solutions. Leveraging MTN's extensive reach and expertise in telecommunications, MTN Fintech is committed to advancing financial inclusion for all and empowering communities in Africa. With a primary focus on pioneering mobile financial services, digital payments, e-commerce, short-term insurance, and remittance capabilities, MTN Fintech strives to establish seamless, accessible, and secure financial ecosystems that shape the future of digital finance.

Follow us:
www.twitter.com/MTNGroup
www.linkedin.com/company/mtn

Source: AETOSWire

View source version on businesswire.com: https://www.businesswire.com/news/home/20240228740116/en/

Mastercard communications contact: Amelia.Naidoo@mastercard.com

MTN Group Press Office

Nikiwe Gwatyu

MTNGroup.PressOffice@mtn.com

Source: Mastercard

FAQ

What is the partnership between Mastercard and MTN Group Fintech about?

The partnership aims to launch a prepaid virtual card for MTN's MoMo customers, expanding digital payment access in Africa.

How many markets will be impacted by this partnership?

The partnership will impact 13 markets in Africa, including Benin, Cameroon, Cote d’Ivoire, Ghana, Nigeria, South Africa, and others.

What are the key benefits of this partnership for MTN's customers?

MTN's customers will gain access to over 100 million acceptance points worldwide, enabling seamless card payments and enhancing cross-border money remittance services.

How will this partnership benefit small businesses?

Small businesses will benefit from wider payments acceptance, access to affordable credit, and secure digital tools, enabling growth and seamless commercial operations.