Mastercard Inc, a leading payment processor, has entered into an agreement to acquire a minority stake in the fintech division of MTN Group Ltd. The CEO of MTN, Ralph Mupita, has confirmed ongoing negotiations for this investment, as reported by Bloomberg. The bedrock of MTN’s fintech initiatives centers around its mobile money offering, MoMo, which boasts an impressive valuation of $5.2 billion, constituting nearly 40% of MTN’s total market capitalization.
This strategic move by Mastercard comes on the heels of their recent investment of $100 million in Airtel Mobile Commerce BV, the holding entity overseeing Airtel Africa’s mobile money operations. In this transaction, Mastercard secured a minority stake in the telecommunications company’s fintech arm, mirroring its forthcoming investment in MTN.
It’s worth noting that Mastercard has previously integrated its virtual payment service with MTN wallets, thereby granting MTN customers the ability to conduct international online payments without the necessity of a traditional bank account. This positioning places MTN in direct competition with established fintech entities like Flutterwave. Furthermore, other notable players in the telecommunications industry, including Airtel Africa Plc, Safaricom Plc, and Vodacom Group Ltd., have also embarked on their own ventures within the fintech sector.
In line with its strategic direction, MTN had earlier outlined plans to generate approximately $1.3 billion through asset sales. These strategies have included actions such as divesting and subsequently leasing assets in both West Africa and South Africa. These initiatives encompass mobile-phone towers and the relinquishment of their stake in IHS Holding Ltd., a tower company listed on the New York Stock Exchange. However, the sale of the aforementioned stake has encountered delays due to differences in perspectives between MTN and IHS Holding’s management.
