The news: Visa partnered with Kenya-based mobile money platform M-Pesa (owned by telecom giant Safaricom) to launch the M-Pesa GlobalPay virtual Visa card, per TechCrunch. The virtual card will let users make payments across Visa’s global network with the M-Pesa app or the USSD mobile payment method.
What is M-Pesa? M-Pesa is a mobile money platform that offers digital payment services through a user’s SIM card. M-Pesa is similar to peer-to-peer payment platforms in that it also lets users send, receive, and hold money in their accounts. However, M-Pesa transactions are sent via SMS messages and no bank account is required to use the service.
Since its 2007 launch, M-Pesa has amassed 51 million users, 30 million of which are in Kenya alone. The system has been quite successful for Safaricom and has become the telecom’s biggest revenue source. M-Pesa’s revenue increased nearly 40% annually, hitting $927 million in the year that ended March 2022, per TechCrunch.
Why it’s worth watching: Digital payments are quickly replacing cash in Africa—making the region an attractive destination for digital payment powerhouses like Visa.
Cash use in the Middle East and Africa slid 16.3% annually in 2021 and is expected to decline nearly 30% between 2021 and 2025, according to FIS. This trend may be why global payment players are ramping up their presence in the region:
The opportunity: Here’s how the tie-up can help fuel growth for Visa and M-Pesa:
Since card tech infrastructure is still developing across Africa, Visa and M-Pesa must continue their development efforts for their virtual card solution to see long-term growth.
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