Ask Nigeria Header Logo

Global payments providers in Africa

Photo of author

By Mercy Kelani

Africa has telecom operators with extensive fintech businesses.

In 2011, global payments provider, Visa, made an announcement of its acquisition of Fundamo, a platform provider of mobile financial services in South Africa for financial institutions and mobile network operators in developing economies. The deal, totaled $110 million, that was sealed had a basic strategy — to be a route for Visa in reaching the consumer market at the low-end in Africa. During the period, Visa was functioning as a worldwide payment card provider, however, many of its customers were in middle-upper earning range. Whether through usage of a Point-of-Sale terminal, on the web service or at the bank, many people needed internet service to make transactions with their card, especially the people at the lower income range.

Nevertheless, Africa has been projected to be the next frontier of payments due to mobile money platform MPesa by Safaricom, which was initiated in 2007 and has grown to about 17 million subscribers in December 2011, in Kenya only. According to the International Telecommunication Union, the difficulty was the penetration of mobile internet which was about 4 percent. This indicated that, on the continent, millions of people were unable to use cards for transactions. The plan initiated by Visa was to solve the difficulty, using the acquired Fundamo.

Visa failed investment with Fundamo still reflects in Africa’s fintech.

This challenge happened during the time Visa’s closest rival, Mastercard, finalized its partnership of $37.4 million with the International Finance Corporation. In May 2012, the collaboration was endorsed to expand microfinance banks, while developing cost-effective delivery channels and new products, and expanding coverage in often hard-to-reach and new locations. Fundamo is currently inoperative, and some experts considered it a bad investment by Visa. A growth partner at AnD Ventures and Africa partner for Alta Global Ventures, Osaretin Victor Asemota, said that Fundamo was bought by Visa under the watch of African telco, but was discarded when Visa discovered that it did not align with their plans.

He stated that Fundamo developed his company as they assisted in the implementation of mobile money in MTN. It was permitted by MTN to build and experiment. Although, the acquisition by Visa was seen as a win before it was regarded as the opposite. He added that the failed investment hovers around the approach of Visa in competing in Africa’s fintech ecosystem, even though investments in more fintech companies has been done in recent years by the payment system operator. According to Asemota, Visa was defeated by impeding Fundamo from accepting the telco-led agent banking plan.

A MoU was signed by Mastercard with MTN Group.

Upon the acquisition of Fundamo, Visa rejected any effort toward developing the attainment of the product. Asemota said that he knew it would be a massive thing since he saw the gap with agents. It was also discovered that Fundamo powered Firstmonie of First Bank of Nigeria. In Nigeria, Firstmonie is still known as the most successful bank-sponsored agent network across Nigeria, but is still a silo, in comparison to Opay that is enabling with people building on it. A different approach has been taken by Mastercard to invest in Africa.

Also, MasterCard has bought equity stakes in Africa — in two of its largest telecom operators — that have extensive fintech businesses. Among mobile money agent providers, these two telcos are among the biggest providers. Airtel Africa and Mastercard, in 2021, appended signatures to a new commercial framework and extended commercial agreements worth about $100 million which will strengthen their collaborations in many areas and geographies which include remittance solutions, merchant acceptance, payment processing, payment gateway and card insurance. Also, a Memorandum of Understanding (MoU) was signed by Mastercard for a minority investment in the MTN Group’s fintech business, the largest mobile network operator in Africa.

Mastercard becoming a significant partner in MTN fintech business.

The valuation of MoMo increase to $5.3 billion was recognized by the investment which makes it the most respected fintech industry in Africa. MTN MoMo witnessed an increase to $1.3 million at the rate of over 18.1 percent, aside from the total population of its customers which was 60.5 million. Founder of Afridigest, Emeka Ajene, said that the fintech business of MTN is not bought by Mastercard, but it is now obvious that it is becoming a significant partner by purchasing as much as 3 percent of the business. According to a report from McKinsey & Company in 2022, it was projected that payments would increase by 7 percent.

Related Link

Wikipedia: Website

The content on is given for general information only and does not constitute a professional opinion, and users should seek their own legal/professional advice. There is data available online that lists details, facts and further information not listed in this post, please complete your own investigation into these matters and reach your own conclusion. accepts no responsibility for losses from any person acting or refraining from acting as a result of content contained in this website and/or other websites which may be linked to this website.

Fact Checking Tool -