Visa partners with Safaricom to take the future of mobile money in Africa to the next level. They partnered with Kenya’s giant telecom company Safaricom- operator of the M-Pesa mobile money product.
This positioning also opens to M-Pesa’s wide range of financial services network in East Africa and Visa’s global merchant and card network across 200 countries. According to a release from Safaricom they will also collaborate on developing products that will support digital payments for M-Pesa customers although the collaboration is subject to regulatory approval.
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M-Pesa app is one of the most recognized fin-tech products in Africa and has slowly risen to be used as a point of reference in using mobile money to increase financial inclusion. Although Africa is home to the largest share of the un-banked population in the world, Kenya has risen above the challenge and has grown to be one of the highest mobile money penetration rates in the world. This achievement is believed to be largely due to the presence of M-Pesa which stands as Africa’s sixth largest economy. M-Pesa has 24.5 million customers and a network of 176,000 agents across Kenya whose population is a population of 53 million. Their market share in the mobile money industry in the country is just above 75% for years.
Although much details hasn’t been given, both companies will also use the partnership to facilitate online commerce. The payment providers both aim to “offer an expanded set of mobile e-commerce capabilities to merchants and consumers by enabling secure and convenient cashless payment solutions,” this was said during a release sent to TechCrunch.
Visa partners with Safaricom isn’t new as over the last year, Visa has been partnering with African fintech companies. They have also announced their partnership with payment startups like Paga and Flutterwave, they went a step further and invested $200 million in Interswitch( a Nigerian financial service provider). During its 2020 Investor Day presentation, Visa iterated its plan on working with the continent’s payment startups as part of its strategy to expand on the continent.
Although Safaricom is not a startup, the reach of its M-Pesa network is certain to give Visa a lasting presence in Africa, This partnership will also expand the financial services offered to the wide reach of Safaricom’s East African consumer and small business network.