Africa’s telecom giant, MTN, will before long be controlling the payment and remittances market on the continent. Having built a fintech power esteemed at $5.2 billion, which preferably positions it among Nigeria’s top five banks as far as assets, the telco is welcoming on essential partners for the surge.
In August 2023, MTN announced that MasterCard will acquire a minority stake in its fintech unit. Open to selling up to 30% of the unit, the telco is as yet exploring for a few more strategic partners.
MTN is releasing the power of mobile money and fintech to offer financial services. Its mobile money platform MoMo has already set the pace. With 61 million active users, it executed $8.3 billion worth of transactions in the first half of this year. This represented a 37% increase from the same period last year.
Considering this, a research associate at the Financial Innovation Hub of the University of Cape Town’s School of Economics Fabio de Masi, said:
“More people in Africa are relying on cell phones to access financial services. This is a market MTN and MasterCard realized they can exploit to the maximum”
In taking advantage of this market, the telco has an early advantage conpared to banks. Through the two features and smartphones, it approaches a variety of behavioral data that fundamentally give an exact profile of customers, including their loan chances. This makes it simple to tailor items and services for each section, including the unbanked. In 2022, the unit broadened credits worth $1.4 billion.
Up to this point, MTN’s fintech arm has 16 different offerings. With the partnership with MasterCard, it added another layer in seeking to control payments and remittances. A study by McKinsey has predicted a 20% annual growth for revenues from electronic payments in Africa, ultimately generating $40 billion by 2025.
This potential, coupled by the fact that MTN fintech unit facilitated $2.2 billion worth of remittances in 2022, means the telco is the quintessential rival to banks. The coming together of one of the biggest players in payment processing and Africa’s largest mobile provider is a lethal combination,” says de Masi.
credit: Global Finance Magazine