Visa and pan-African fintech leader MFS Africa have announced a partnership that will help bridge the gap between the rapidly growing mobile money ecosystem in Africa and the world of online digital payments.
This move will significantly expand Visa’s reach and its ability to open up commerce to the region.
Mobile money wallets are already prevalent across Africa, but without a virtual or physical network credential associated with them, many international online services are unavailable to users.
Visa virtual card
To help solve this problem, MFS Africa – Africa’s largest digital payments hub, connecting through one API more than 180 million mobile wallets on the continent – will distribute Visa payment credentials across multiple markets in Africa.
This will allow mobile money users connected to the MFS Africa platform to generate an instant Visa virtual card with a 16-digit number and link it to their mobile money accounts to use for remittances and e-commerce transactions.
MFS Africa will also integrate Visa’s real-time push payments solution Visa Direct, to provide mobile money users on the MFS Africa platform a fast, convenient and secure way to send and receive money and remittances directly from/into their mobile money wallets via eligible card credentials.
According to the World Bank, remittances to Sub-Saharan Africa are set to increase by over 5.6 per cent between 2019 and 2020, reaching US$51 billion.
However, the region is still the most expensive in the world to send money to, with an average cost of 9.3 per cent.
Founder and CEO of the Accra, Ghana headquartered MFS Africa Dare Okoudjou says: “In the past few years, we have been relentlessly focused on creating new digital pathways between mobile money users in Africa. Having reached a significant scale, we are now turning our focus to connecting our network to the wider world, to unleash the wealth of opportunity that trade with Africa presents to the global economy.”
The company faces stiff competition from Earthport, Currencycloud, TransferWise, Money Mover, WeSwap, Payvision, WorldFirst, GlobelMoney, Caliber and SVB.
To counter this and leverage on Visa’s footprint, Okoudjou added that the American company is an invaluable partner to support the next stage of MFS Africa’s expansion.
“The reach of the Visa network is unparalleled, and we look forward to working with Visa to realise our vision of a world in which no one is limited in what they can achieve when it comes to payments.”
“Africa is adopting a mobile-led, digital payments ecosystem and with Visa looking to accelerate the distribution of payment credentials and expand the acceptance space for digital payments, this partnership is an important one,” said Jack Forestell, Executive Vice President, Chief Product Officer, Visa.
“MFS Africa will help us enable digital payment use cases at scale through their aggregation model.”
Last year, MFS Africa announced the second close of its Series B funding round led by LUN Partners Group, a Shanghai-based global investment management group.
Goodwell Investments – an Amsterdam-based investment firm focused on inclusive growth, fintech and financial inclusion – joined LUN Partners Group in investing additional capital into the fintech and mobile payments services provider.
ShoreCap III, LP managed by US-based Equator Capital Partners and UK-based FSD Africa joined the round as new investors, signalling global confidence in MFS Africa’s model, and bringing this total round of funding to US$14 million.
The investment was to provide MFS Africa with access to additional markets to broaden its reach in providing cross-border, cross-currency, and cross-network solutions to merchants, mobile network operators, and money transfer companies.
Among other assets, the new partners would also bring expertise and resources to help reinforce MFS Africa’s financial inclusion mission.