Visa, Mastercard are Betting Big on Africa

Africa is the world’s next great emerging market, and Visa and Mastercard are charging right in.

The two credit card giants have poured hundreds of millions of dollars into various investments on the continent, from promising fintech startups to the broader payments ecosystem, according to a Rest of World feature published Wednesday.

Give ‘Em Credit

The goal for both Visa and Mastercard is simple: enmesh themselves in every nook and cranny of the massive, disparate digital payments ecosystem emerging across the massive continent. “[The two US companies] make money when there is a transaction made with the card, so their ambition is to get more and more people in Africa to use their own cards, and for that, they need the help of fintechs,” Ismail Belkhayat, founder and CEO of Morocco-based fintech startup Chari, told Rest of World.

That’s meant everything from launching startup accelerators and incubators (Chari was a member of Visa’s inaugural incubator), to making direct investments, to dispersing non-equity investments and grants to companies large and small:

• Mastercard last month invested $200 million for a roughly 4% stake in leading telecom company MTN’s mobile money business and made a similar bet in fellow telecom giant Airtel Africa’s payments business in 2021. Visa, meanwhile, has integrated its global virtual card network with Kenyan payments company Safaricom, which has a 99% market share in the country; Visa also plans $1 billion in investments over the next five years to scale operations, a spokesperson told Rest of World.
• Rest of World calculated that Visa and Mastercard have directly or indirectly injected some $700 million into Africa’s payments industry, based on publicly available information from both firms.

Visa’s non-GAAP net income in fiscal year 2023 rose to over $18 billion, while Mastercard’s hit nearly $12 billion — meaning both companies have plenty of petty cash to spare for international bets (call it the perks of operating in a virtual duopoly).

Bless the Rains: The payoff could be massive. Africa’s digital payments industry saw revenues of $24 billion in 2020, generated by individual transactions totaling over $800 billion, according to a 2022 McKinsey study, which predicted growth of at least 30% per year through 2025. Toto sang it best: It’s gonna take a lot to drag me away from you.