Mastercard to Invest $200m in MTN’s Fintech Business

Mastercard, the world’s second-largest payments technology group, has announced a substantial investment of $200 million (R3.8 billion) into MTN’s fintech business, marking a significant move by Africa’s largest mobile operator to advance financial inclusion across the continent.

The investment values MTN’s fintech business at $5.2 billion, translating to approximately a 3.8% stake. The proposed deal, initially announced by the mobile operator in August, underscores the growing interest in partnering with African businesses to leverage the continent’s burgeoning mobile technology ecosystem and address gaps in access to financial services.

In recent years, banks and financial services providers have recognised the immense potential of collaborating with African enterprises, given the continent’s youthful population and rapid technological advancements. The emergence of new technologies offers promising opportunities to expand financial inclusion and bridge existing gaps in access to banking and payment services.

MTN highlighted that the agreements with Mastercard complement their broader commercial relationship, aimed at supporting the ongoing development and growth of technology and infrastructure. This collaboration is poised to accelerate the fintech business’ payments and remittance services, further enhancing MTN’s ecosystem.

MTN, with a market valuation of approximately R176 billion on the JSE, has actively sought strategic partnerships for its fintech business, intending to divest up to 30% of its stake. Fintech encompasses various services, including its mobile money (MoMo) platform, insurance, airtime lending, and e-commerce, contributing nearly a tenth of the group’s revenue of R113 billion in the first half of the year ending in June.

Mastercard, boasting a public valuation exceeding R8 trillion and a presence in over 200 countries and territories, is well-positioned to support MTN’s fintech ambitions. The investment signals Mastercard’s confidence in Africa’s fintech landscape and its commitment to fostering financial inclusion across the continent.

As Africa continues to embrace digital innovation and mobile technology, partnerships between global industry leaders like Mastercard and local enterprises like MTN are instrumental in driving socioeconomic development and unlocking new opportunities for financial empowerment and inclusion.