MTN Fintech Unit hunts for more investment after Mastercard

MTN Group Ltd. is actively seeking additional strategic investors, potentially up to three more, to join Mastercard Inc. in its fintech division, a segment of the African telecommunications company that is estimated to be worth $5.2 billion.

CEO of MTN, Ralph Mupita, shared during an interview on Bloomberg TV that the company is open to selling a maximum of 30% of its fintech business. He suggested the possibility of involving three or even four strategic partners in this endeavour.

Just recently, MTN announced a memorandum of understanding with Mastercard for a strategic investment. This partnership will not only involve investment but also the utilisation of Mastercard’s technology to enhance the range of services offered by MTN.

In Africa, where a young and underbanked population is increasingly relying on mobile phones to access essential services, there is a lucrative and rapidly growing space in the fintech sector for wireless carriers. This trend has predominantly led to investments in mobile payment systems, with notable startups like Flutterwave Inc. and Interswitch Ltd. making significant strides.

As the largest wireless operator in Africa, MTN boasts a customer base of 60 million for its fintech division, which presently provides fundamental services like cash-in and cash-out, as explained by Mupita.

The advent of mobile money and fintech services has enabled the transformation of financial access, propelling individuals from a state of limited financial services to utilising their phones for a multitude of financial transactions, Mupita highlighted.

Despite the announcement of the deal, MTN’s shares experienced a slight decline of 0.7% to 134.90 rand in Johannesburg at 2:55 p.m. Shares had seen a 4.9% surge on Monday, following the initial announcement of the partnership, marking the highest increase in three months.