Africa: The Next Great Growth Story for Visa and MasterCard?
Monday, October 21, 2013
Africa’s role in the global economy is visibly changing. It is no longer the world’s tip jar, but rather a formidable growth pillar.
Kenyan telecom company Safaricom, for instance, is the world leader in mobile payments. More than 17 million of Kenya’s 40 million citizens use Safaricom’s mobile payment service, M-PESA. In addition, close to 25% of Kenya’s Gross National Product flows through the service.
Interestingly, the success of mobile money is not an exclusive Kenyan affair. Africa as a whole is embracing mobile money as a way to enhance convenience and security as well to step up efforts in financial inclusion for the unbanked.
In light of this, payments bigwigs Visa and MasterCard have increased their presence in the continent. Not only have Visa and MasterCard increased issuance of plastic money, but they have also made bold mobile money initiatives. Could this spur the next round of prolonged growth for the two bigwigs?
The foray into African mobile payments
Visa has forged a strategic alliance with French telecom heavyweight Orangefor the Botswanan mobile money market. As of August, subscribers of Orange’s mobile money service, Orange Money, in Botswana were able to link their mobile money accounts to the Visa network. Users who sign up with the service get Visa cards that they can use to make online transactions, point of sale transactions, and withdraw money from ATMs, among other services.
- mobile money