Mastercard, MTN in Partnership to Expand Digital Payments Across Africa
Mastercard has entered a “strategic partnership” with MTN to enable millions of consumers in 16 countries across Africa to make global e-commerce payments safely and securely.”
Mobile devices are the primary channel used to connect to the internet in sub-Saharan Africa and that trend is expected to grow over the years – by 2025, there will be an estimated 300 million more people using their devices to access internet services, according to GSMA.
Mobile financial services have thus become the dominant form of digital payments, with twice as many mobile money accounts as bank accounts in the region. Consumers also increasingly expect to have access to a broader range of digital financial services but are mostly restricted to a local base of online and offline businesses. That curtails their ability to engage in global commerce.
In light of this, Mastercard has entered a “strategic partnership” with MTN to enable millions of consumers in 16 countries across Africa to make global e-commerce payments safely and securely, the company said in a press statement on Friday.
Through a Mastercard virtual payment solution linked to MTN MoMo (Mobile Money) wallets, consumers and merchants can engage with brands and businesses abroad through digital commerce as well as make payments to global online merchants through a seamless and secure digital payment experience on websites and mobile applications. That would help extend their reach to an international marketplace and unlock a host of opportunities.
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The solution, which is available regardless of whether or not the customer has a bank account, 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.
Africa has seen significant financial inclusion gains over the years, largely thanks to expanded digital financial services. In 2011 the level of financial inclusion in Sub-Saharan Africa was just over 23 percent. By 2017, it was almost 43 percent, with a significant increase coming from digital financial services, according to the World Bank’s Global Findex financial inclusion report.
While the share of adults in Sub-Saharan Africa with a financial institution account barely budged, the share with a mobile money account almost doubled to 21 percent. In every other region of the world, mobile money use is lower than 10 percent.
“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,” said MTN Group Chief Digital and Fintech Officer Serigne Dioum.
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 the Mastercard partnership, it is now set to offer even more.
“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,” notes Amnah Ajmal, Executive Vice President for Market Development, Mastercard Middle East and Africa. “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.”
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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.
The company will extend the virtual payment solution offering throughout its Fintech footprint, the company said, adding that 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.