Mastercard to acquire a stake in South Africa's MTN

According to MTN’s officials, Mastercard is expected to conclude the investment soon, as it represents a milestone towards accelerating their company’s fintech services. MTN’s shares grew by 7% on the Johannesburg stock market since the announcement has been made. However, the size of the fintech stake has not been disclosed, as neither has the amount paid by Mastercard. The USD 5.2 billion estimations are excluded cash and debt, but Mastercard’s investment amount will soon be disclosed.

The announcement comes after MTN’s release of the company’s half-year performance report. As per the company’s representatives, despite a challenging macro backdrop, their business’ service revenue has increased by 15%, reaching approximately USD 5.6 billion. Their fintech services revenue increased by 22%, data services revenue by 24%, and voice services revenue increased by 6%. By the end of June 2023, MTN’s subscriber base has reached 292 million, a growth of 4% than the same period last year. In the first half of 2023, the volume of transactions for the company’s fintech business increased by 37%. 

Reintroduced in August 2019 in Africa, MTM’s Mobile Money (MoMo) enables consumers and merchants to access payments, ecommerce, insurance, lending, and remittance services. The company presented considerable growth, reaching 69.1 million active users, 1.3 million agents, and 1.5 million businesses at the end of 2022. By launching the Mobile Money Open API platform, the company made MoMo available to third parties, therefore allowing developers improved access to the MTN MoMo proprietary software platform and enabling them to create digital financial services.

The company’s fintech platform received a banking licence in Nigeria in April 2022, therefore aiding in extending MTN’s services to wider banking operations. Back in June 2021, MTN announced their partnership with Flutterware, allowing businesses in Cameroon, Côte d’Ivoire, Rwanda, Uganda, and Zambia to receive payments via MoMo. The collaboration indented to contribute to the high mobile penetration in Africa by increasing mobile money usage and improving the local economies. 

Mastercard’s input in the South African region is not limited to its investment in MTN. Back in June 2023, the company partnered with PayU to launch Click to Pay in South Africa. Click to Pay enables consumers to make payments without entering their card data, therefore limiting the stored sensitive information across businesses’ platforms. According to PayU Africa’s officials, Click to Pay is an open standard from EMV Secure Remote Commerce standard for ecommerce and card-not-present checkout transactions, delivering more consistent checkout experiences, while reducing the steps customers face when completing a purchase. Mastercard’s representatives have confirmed that Click to Pay is set to launch in more markets in the upcoming period, as it is already present in the UAE, Qatar, Kuwait, and Saudi Arabia.

Mastercard also invested USD 100 million in Airtel Africa’s mobile money business back in 2021, the value reaching USD 2.65 billion. Holding a minority stake in Airtel Mobile Commerce BV, Mastercard has acquired a 25% stake in the unit, as per Airtel’s plan to monetise the mobile money business. 

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