Visa, Mastercard eye Africa's booming mobile money market

Global payment giants, including Mastercard and Visa, are pouring billions of dollars into African companies driving the sharp expansion of mobile money in Africa. Recent deals have focused on mobile money operators, allowing users to send funds using simple cell phones, and platforms that facilitate mobile money payments for merchants like Uber and Netflix, all without the need for traditional credit cards or bank accounts.

In August, Mastercard struck an agreement to acquire a minority stake in the fintech business of South Africa's MTN Group. The deal, which is valued at $5.2 billion (though not yet finalized), opens the doors for Mastercard, with a potential stake of up to 30%, to capitalize on the growing mobile money sector. This development followed Visa's announcement in late 2022, where they committed to investing $1 billion in Africa over the next five years, with a primary focus on expanding digital payment solutions, further advancing the mobile money landscape in Africa.

These investments coincide with the remarkable growth of mobile money in Africa, where online transactions have historically trailed other regions, especially North America. As of this year, the U.S. Commerce Department projects that nearly 435 million Africans will engage in online spending, nearly doubling the pre-pandemic level, propelled by the sustained use of mobile money for shopping, education, and entertainment.