The Scramble For African Fintech? Visa And Mastercard Invest Billions Into The Booming Sector

Visa and Mastercard are setting their sights on Africa’s fintech market.

Africa’s booming fintech sector

E-commerce is booming across the continent. The Wall Street Journal reports that by the end of this year, an estimated 435 million Africans are expected to shop online, a nearly twofold increase since the pandemic.

However, people are less likely to make payments using cards than in other global markets, relying instead on mobile money, digital wallets, and bank transfers.

Visa and Mastercard, determined to stay relevant, are pouring millions of dollars into the continent in a move some describe as a scramble for fintech in Africa.

Recent strategic moves have seen these giants focusing on mobile money operators, which facilitate fund transfers using basic cellphones.

They have also invested in platforms that enable merchants like Uber and Netflix to process payments without relying on traditional banking systems.

Visa in Africa

Visa committed to a $1 billion investment over five years, focusing on digital payments and supporting African fintech startups through an accelerator program. 

In particular, its Africa Fintech Accelerator program has swiftly gained attention, drawing in fintech startups across the continent. 

“We’ve been increasing our investments in Africa steadily, and just over a year ago pledged to invest $1 billion in Africa over the next five years to scale operations, deploy innovations, and deepened collaboration,” a Visa spokesperson told Rest of World.

Mastercard in Africa

Similarly, Mastercard Foundation’s efforts to fund early-stage companies through local investment firms.

Mastercard’s strategy in Africa is characterized by key investments and partnerships, such as acquiring stakes in the mobile money businesses of telecom players like MTN and Airtel Africa. 

Mastercard took a minority stake in MTN Group’s fintech business, valued at $5.2 billion, and previously invested $100 million in Airtel Africa’s mobile money business.

These moves may expand Mastercard’s influence in the mobile money sector and align with its objective to integrate more consumers into its transaction network.

So far, Visa and Mastercard’s combined investments in Africa are estimated at around $700 million.