In the race to win large shares in the growing fintech and e-commerce space in Africa, mobile network providers are taking to partnerships with existing payment companies.
In what seems like a step to expand the MTN MoMo partnership, MasterCard and MTN on Tuesday announced a strategic partnership to enable millions of consumers in 16 countries across Africa to make global e-commerce payments safely and securely.
The partnership is to be facilitated through a MasterCard virtual payment solution linked to MTN MoMo (Mobile Money) wallets, to help consumers and merchants engage with brands and businesses abroad through digital commerce, extending their reach to an international marketplace and unlocking a host of opportunities.
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With the growing mobile internet market across Sub-Saharan Africa, the partnership aims to secure a larger share in the mobile payment market. GSMA said by 2025, estimated 300 million more people will be using their devices to access internet services in Africa. In light of this significant growth, mobile financial services have become the dominant form of digital payments, with twice as many mobile money accounts as bank accounts in the region. As a result, consumers increasingly expect to have access to a broader range of digital financial services.
The partnership will also remove the bottlenecks that have mostly restricted consumers and merchants to a local base of online and offline businesses, therefore curtailing customers’ ability to engage in global commerce.
Through this strategic partnership, MTN customers with a Mastercard virtual payment solution linked to their MoMo wallets can make payments to global online merchants through a seamless and secure digital payment experience on websites and mobile applications. The service is available regardless of whether or not the customer has a bank account, the companies said.
They explained that the solution will enable consumers to explore and shop at well-known global e-commerce brands and pay quickly and securely for leisure shopping, travel, accommodation, entertainment, streaming services and more. It will also allow small business owners to purchase from suppliers abroad and pay with the virtual payment solution.
“We are very excited about this partnership with MasterCard, which is another step in realizing our ambition to build Africa’s largest fintech platform, accelerating economic and social development through digital innovation to the benefit of citizens across the continent and beyond,” said MTN Group Chief Digital and Fintech Officer Serigne Dioum.
“This noteworthy partnership is another step to enable our customers to participate in the global economy. We are resolute that accelerated financial inclusion is a potent enabler of socio-economic development that empowers the most vulnerable in society,” he added
Spurred by COVID-19 pandemic, MTN MoMO has recorded significant growth across Africa, especially in Nigeria and South Africa. As AfCFTA kicked off, MTN and MasterCard are looking to fill a payment void in the African continent by facilitating easier mobile-based borderless intra-African financial transactions.
“This significant milestone will enable millions of MTN customers to benefit from global digital commerce and drive digital and financial inclusion across Africa through easy and secure access to financial services,” said Amnah Ajmal, Executive Vice President for Market Development, Mastercard Middle East and Africa.
“At Mastercard, our innovation strategy is based on partnerships and collaboration. This agreement with MTN shows that we can deliver innovative digital solutions that have a far-reaching impact and realize the true potential of inclusive growth across the continent. Partnering with MTN allows us to accelerate our global pledge to connect 1 billion people to the digital economy by 2025, bringing us closer to a world beyond cash,” he added.
MTN and Mastercard first launched the digital payment solution in 2018 for MoMo customers. MTN, the largest mobile network operator, is the ‘Most Admired African Brand’ based on spontaneous consumer responses in Brand Africa 100: Africa’s Best Brands 2020 survey and the most valuable telecoms brand in Africa by Brand Finance Africa.
MTN said it will extend the virtual payment solution offering throughout its Fintech footprint. The expansion of this payment solution will play a significant role in driving the growth of digital inclusion and e-commerce thus increasing MTN MoMo customer inclusion into the global economy.
Initially designed to facilitate the transfer of cash between mobile users, MTN’s MoMo offering is now much broader – including loans, insurance, remittances and payments.
With this strategic partnership, MTN is pushing to exert dominance in the African mobile payment market, where companies like Safaricom’s M-pesa, are already enjoying domineering growth.
We will be interested in this one, if it works efficiently and seamlessly on both web and mobile app. The ones that claim to be fintechs and payment processors have failed spectacularly, I need something much better.
Nothing serious has been done in the payment processing space yet, anyone with solid and reliable product will still win the market; for now it’s more of noise than substance.
Local processing is struggling, that of intra-Africa is still a holy-grail. The failure rate is still dizzying.