Mastercard Strengthens Fintech Presence With Stake in MTN

Africa’s largest mobile network operator, MTN Group, has announced the signing of a Memorandum of Understanding (MOU) with Mastercard for a minority investment into its fintech division.

This move has raised the valuation of MTN’s fintech business to $5.2 billion, a figure nearly 40 percent of MTN’s overall market value, as reported by Reuters.

Acting Governor of the Central Bank of Nigeria (CBN), Folashodun Shonubi, disclosed the development to State House correspondents at the Presidential Villa after briefing President Bola Tinubu on efforts to stabilize the naira’s decline. Shonubi revealed that the deal’s definitive investment agreements would be signed in the near future following customary due diligence.

The investment aligns with Mastercard’s strategy to expand its footprint in Africa’s burgeoning fintech sector and establish a foothold in a market experiencing a surge in new payment channels, leading to fresh strategic partnerships within the ecosystem. While Mastercard remains influential in the card payment industry, it seeks to strengthen its position in the lower end of the payment market.

This announcement comes as telecommunications companies, including MTN, plan to run their fintech units as independent business entities. Following news of the partnership with Mastercard, MTN Group’s shares experienced a 7.41 percent increase on Monday morning.

Ralph Mupita, CEO of MTN Group, affirmed the company’s commitment to its strategic goals, stating, “We are focused on the continued execution of our Ambition 2025, which remains relevant in the current macroeconomic volatility and presents attractive scope for growth.”

Mastercard’s investment strategy in Africa has recently gained traction due to growing competition in the fintech sector. The rise of mobile money and new payment channels has reshaped the market, prompting Mastercard to strategically invest in telco-led fintech ventures.

The recent deal with MTN is the second of its kind for Mastercard in the African fintech ecosystem. In 2021, Mastercard entered into a significant commercial agreement with Airtel Africa, further deepening their partnership across various sectors including card issuance, payment processing, and merchant acceptance.

Experts note that Mastercard’s stake in telco-led fintech businesses could position the company as a dominant player in the African payment market. MTN’s fintech unit, MoMo, is now valued at $5.2 billion, making it the most valuable fintech company in Africa. MTN’s fintech revenue has grown significantly, contributing 9.3 percent to its total service revenue, with plans to increase this to over 20 percent.

While the details of the investment remain undisclosed, this partnership signals a significant move for both MTN and Mastercard in the rapidly evolving African fintech landscape.