Visa will enter a partnership with MFS Africa, a pan-African mobile money hub, with a view to linking Africa’s mobile money ecosystem with global digital payments and tapping into the $50bn African remittance market.
The partnership is intended to enable people with mobile wallets in Africa to pay for international online services that are currently unavailable to most African users as well as to receive money sent from abroad. MFS says it is Africa’s largest cross-border digital payments hub, connecting more than 180m mobile wallets accessed through phones in 30 countries.
Dare Okoudjou, founder and chief executive of MFS Africa, said his company already handled tens of thousands of intra-African cross-border transactions between different phone networks, something that will become more important as the 54-nation African Continental Free Trade Area begins to come into effect from next year.
Partnering with Visa, he said, would enable users to extend their transactions outside Africa. “Now you can receive money from the US and make a payment in France,” he said. “Any kid with a mobile wallet in Kigali should now have enough to deal with the rest of the world,” he said, referring to the Rwandan capital. In the future, MFS would explore the possibility of extending the service to Chinese digital money transaction services, such as Alipay, he said.
Jack Forestell, Visa’s chief product officer, said: “Africa is adopting a mobile-led, digital payments ecosystem and with Visa looking to accelerate the distribution of payment credentials and expand the acceptance space for digital payments, this partnership is an important one.”
There is increasing interest from fintech providers in building on Africa’s digital money network, which was pioneered a decade ago in east Africa but is still fragmented and patchy.
Some countries, including Nigeria, have been more cautious about allowing telecoms companies to move into banking. Advocates say this is excluding tens of millions of potential customers who cannot afford to open a bank account from accessing financial services. It is also making life harder for eCommerce companies such as Jumia, which listed in New York earlier this year but has since retrenched from some African markets.
Visa has shown an appetite for investing in Africa. In November, it took a stake, reported as 20 percent for $200m, in Nigerian fintech Interswitch, valuing the company at $1bn.
Mr. Okoudjou said the Visa partnership should help lower the cost of remittances into Africa, which are currently the most expensive in the world with providers taking a nearly 10 percent cut in transaction fees. Our mission is to bring down the cost of remittances into and within Africa.