Mastercard and prepaid payment processing firm Global Technology Partners (GTP) have entered a partnership agreement to offer prepaid payment solutions in Africa. The firms will work together to build and offer a range of prepaid payment solutions to government organizations, financial institutions, individual, and corporate customers. Through these solutions, Mastercard intends to boost innovation in travel and tourism industry. The reloadable prepaid cards will enable consumers to make payments for international travel and online purchases while also enable employers to offer payroll solutions. The partnership with GTP will additionally offer digital wallets and virtual cards to consumers in the region.
Most of the people in Africa are unbanked and the region also lags in card and mobile banking penetration. This gives significant advantage to financial institutions and payment firms such as Visa and Mastercard. It is estimated that in spite of vast advertising and investment by firms such as Visa, credit card penetration in the Sub-Saharan Africa is less than 5%. The country’s economy is supporting cashless transactions. Moreover, Africa has more number of mobile phones than in Europe and number of mobile users in Africa have surpassed that in US.
Mastercard has been focusing on expanding its presence in the country through partnerships with various financial institutions to offer its cards. In 2011, Mastercard launched virtual wallet in Kenya that allowed users even without a bank account to use the card for making purchases. Later in 2013, through a partnership with Nigerian National Identity Management Commission, Mastercard launched smart cards in Nigeria that enable users to make electronic payments.
According to PayNXT360, mobile payment transactions are recording strong growth rates across key African economies. Mobile payment transaction value in Kenya and Nigeria is expected to grow at a CAGR of 17% and 59%, respectively during 2017-2021. South African mobile payment market has also recorded strong growth over the last two years. Transaction value in the country is expected to reach US$ 18.4 billion by 2021.
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