Mobile Money: Airtel & MTN On Each Other’s Heels With African Fintech Ambitions

Two major telcos in Africa are pumping up efforts to scale their mobile money businesses in the continent.

None other than Airtel Africa and MTN Group, these two telecom operators have propped up the million and billion-dollar mobile money opportunity almost at the same time.

Some two weeks ago MasterCard invested USD 100 Mn into Airtel Mobile Commerce BV (AMC BV), acquiring a minority stake in the division of Airtel Africa—a subsidiary of India’s Bharti Airtel.

For a global payments giant like MasterCard to make such an investment, it means the mobile money gospel is starting to take firmer roots in other parts of Africa—outside Kenya, for instance.

The transaction did not only follow a USD 200 Mn investment in Airtel’s mobile money arm but also valued the business at USD 2.65 Bn.

Meanwhile, there is an existing partnership between the telco and MasterCard, since 2019 when Airtel linked up 100 million of its subscribers to MasterCard’s networks. That’s typically a partnership resulting in shareholding.

At the same time, South African-born MTN Group is talking up an IPO that will value its mobile money arm at USD 5 Bn. Outside Safaricom’s M-PESA, MTN’s mobile money platform is one of the most used in Africa given the telco’s presence in many countries of the region.

The JSE-listed company looks to spin off the entire fintech arm of its business in the continent, a reasonable part of which comprises mobile money services. According to Nedbank Group’s valuation in March, the fintech initiative is worth USD 6 Bn.

Considering Africa’s inadequate financial infrastructure, the mobile money industry has taken deep roots in the continent’s financial habits. Enabling people to use their phone numbers as bank accounts is the fundamental secret to M-PESA’s success in East Africa—particularly in Kenya.

There are more mobile money accounts in Africa than anywhere else in the world. At the end of last year (2020), there were about 548 million people in the continent subscribed to this mode of banking, per stats from the GSM Arena.

These two almost concurring developments come on the heels and knuckles or million-dollar strides in the African fintech space. Chief of all, Flutterwave—which was recently valued at USD 1 Bn—is teaming up with M-PESA to further open payments opportunities in the continent.

Flutterwave has also partnered with America’s PayPal to allows African businesses to send and receive payments internationally.

M-PESA is arguably the most valuable money business in Africa. But with other Africa-focused telcos joining the bandwagon with attractive valuations, there remains more potential for the continent’s digital payments sector.

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