Mastercard ventures into African fintech, snapping up $5.2bn stake in continent’s no.1 telco

Mastercard has acquired a minority stake in the fintech subsidiary of South African telecommunications giant MTN in a deal valued at a whopping $5.2 billion, whereby the partnership will see Africa’s biggest mobile company to strategically leverage the US giant’s technology for its payments and remittance expansion in the continent.
By snapping up the minority stake in MTN’s financial-technology arm, Mastercard, the second-largest payment-processing corporation worldwide, has made waves in the African fintech sector. The shares of Africa’s biggest mobile company, with operations across the continent, surged by a remarkable 10% after the announcement, reflecting just how significant is this collaboration in the booming African fintech sector. The announcement of the deals comes as Mastercard has been looking to build its footprint in Africa and previously pumped $100m in the mobile money business of MTN rival Airtel Africa in 2021.
The collaboration is divided into two phases, with the first one involving a collaborative pact on payments and remittance, which will leverage Mastercard’s advanced technology to drive expansion across Africa’s diverse landscape. The second phase will see the US giant injecting capital as a minority stakeholder within the fintech venture. “This is a really key milestone towards driving the acceleration of our [fintech] services,” MTN chief and president Ralph Mupita commented on the deal. This strategic move comes as Africa’s tech-savvy population increasingly embraces mobile tech to bridge service gaps, especially in finance, a process which has turned the fintech arena into a flourishing playground for wireless carriers.