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Mastercard Inc., a leading global payments and technology company, has recently announced its decision to acquire a minority stake in the fintech division of MTN Group Ltd., This strategic move comes just two years after Mastercard invested $100 million in Airtel’s mobile money business, demonstrating the company’s continued interest in the burgeoning African fintech sector.
Mastercard, headquartered in Purchase, New York, is a multinational financial services corporation. The company operates the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments, and businesses in more than 210 countries and territories. Mastercard’s products and solutions make everyday commerce activities – such as shopping, travelling, running a business, and managing finances – easier, more secure, and more efficient for everyone.
MTN Group Ltd., on the other hand, is a South Africa-based multinational mobile telecommunications company, operating in many African and Asian countries. Its fintech arm is a significant part of its operations, with its mobile money product, MoMo, being a key player in the market. MoMo has been valued at $5.2 billion, accounting for nearly 40% of MTN’s total market capitalisation.
MTN’s CEO, Ralph Mupita, confirmed the investment arrangements with Mastercard are in the final stages, as reported by Bloomberg. This investment will further solidify Mastercard’s presence in the African fintech landscape, following its previous investment in Airtel Mobile Commerce BV, the holding company for Airtel Africa’s mobile money operations.
Mastercard’s investment in Airtel and now MTN is indicative of its strategic approach to tap into the potential of the African fintech market. The company has previously integrated its virtual payment service with MTN wallets, allowing MTN customers to make international payments online without the need for a bank account. This has positioned MTN as a formidable competitor against established fintech companies like Flutterwave.
Other major telecom contenders such as Airtel Africa Plc, Safaricom Plc, and Vodacom Group Ltd. have also ventured into the fintech sector, further intensifying the competition. However, Mastercard’s strategic investments and partnerships position it well to leverage the growth opportunities in this sector.
In a bid to raise capital, MTN had previously announced plans to raise around $1.3 billion by selling assets. These plans include recent actions like selling and leasing back assets in West Africa and South Africa. This involves assets such as mobile-phone towers and their share in IHS Holding Ltd., a tower company listed in New York. However, the sale of this share has been postponed due to a disagreement with the management of IHS Holding.