Since the rise of M-Pesa in 2007, mobile money wallets have become prevalent across Africa. And while that addition to the market has made many things possible for consumers in formerly cash-locked economies, there has been a persistent problem of limitations for users once they want to transact outside their home environment. Because their mobile money wallets lack a virtual or physical network credential associated with them, in general they can not work with international use cases.
But that might be changing, as today (Dec. 11) Visa has announced a partnership with pan-African FinTech leader MFS Africa that is designed for bridging the gap between the rapidly growing mobile money ecosystem in Africa and the world of online digital payments by distributing Visa payment credentials via the MFS Africa digital payments hub. That hub connects around 180 million mobile wallets across the continent, and going forward, the new partnership between the entities will allow mobile wallet users on the 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 eCommerce transactions.
“In the past few years, we have been relentlessly focused on creating new digital pathways between mobile money users in Africa. Having reached 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,” said Dare Okoudjou, founder and CEO of MFS Africa. “We have found in Visa an invaluable partner to support us in the next stage of our expansion. The reach of the Visa network is unparalleled, and we look forward to working with Visa to realize our vision of a world in which no one is limited in what they can achieve when it comes to payments.”
The partnership will also include an integration of MFS Africa into Visa Direct, the card network’s real-time push payments, to provide mobile money users a fast, convenient and secure way to send and receive money and remittances directly from/into their mobile money wallets via eligible card credentials. That addition comes as, according to the World Bank, remittances to sub-Saharan Africa are set to increase by over 5.6 percent between 2019 and 2020, reaching $51 billion. But as popular as the region is for remittances, it is also expensive to send them, with an average cost of 9.3 percent.
“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 and chief product officer at Visa. “MFS Africa will help us enable digital payment use cases at scale through their aggregation model.”