MasterCard prepares for African growth
MasterCard was eyeing a slice of the expected exponential growth from the emerging African market in coming years, particularly as mobile payments surged, Aaron Oliver, the head of emerging payments in the Middle East and Africa for the multinational firm, said yesterday.
Speaking on the sidelines of the Cards and Payments World Africa 2014 conference in Johannesburg yesterday, Oliver said the continent had become almost unrecognisable from what it was eight years ago, with much of the change influenced by technology roll-outs.
“It has become an industry as opposed to the next best thing,” he said.
In sub-Saharan Africa, about 16 percent of adults used a cellphone to pay bills and send or receive money in the past year. There are 42 million active mobile money users in the region, which represents about 70 percent of the global population of active users, according to data referred to by Oliver. About 52 percent of mobile money services are in Africa.
“We have to work on it, bring on new partners so that early adopters can get good experiences, convenience, safe and secure transactions,” Dubai-based Oliver said.
MasterCard, a global payments facilitator between merchants and banks, operates in 48 of the 55 countries in Africa. During the past 12 months it has expanded into seven countries on the continent. The African business is one of the fastest growing businesses for MasterCard, according to Oliver, although he could not share details because of company policy.
Although 85 percent of retail transactions today on the continent were still conducted in cash, Oliver said over time the manufacture of cheaper smartphones with faster processing power could alter this statistic.
“People felt M-Pesa came out of nowhere, but it took 10 years to come out of nowhere,” Oliver said.
He added that the migration from cash to electronic transacting methods remained a behaviour shift.
M-Pesa is the largest mobile money transfer platform on the continent. It is operated by Safaricom, which is a subsidiary of Vodacom’s parent company, UK-based Vodafone.
Mobile money, a cellphone based virtual account from which money can be sent or bills can be paid electronically, has become the method for financial inclusion of the unbanked, offering basic financial transactions.
This week MTN and Ecobank announced a partnership to offer MTN Mobile Money customers Ecobank accounts and the ability to transact between the accounts. Over time mobile money users may be convinced to open a bank account to enjoy additional services, according to Oliver.
In South Africa, the number of people who were banked rose by 67 percent to 3.5 million people last year, compared with a year earlier, according to the Finscope South Africa survey published in November last year. The increase was attributed to organic banking growth and the roll-out of MasterCard cards to social grant beneficiaries to receive their stipend, as well as make payments. - Business Report