In a statement by Ralph Mupita, MTN CEO, it was announced that the company has unanimously agreed to sell a stake in their mobile money app, valued at $5.2 billion, to MasterCard, as reported by Bloomberg.
This move comes after MasterCard invested $100 million two years ago in Airtel mobile commerce BV, Airtel Mobile Money. With this investment, MasterCard acquired a minority stake in the mobile money arm of the company.
MTN Mobile Money (MoMo) offers digital services and financial solutions to over 46 million customers across 21 countries in Africa and the Middle East.
During the first half of the year, MoMo’s transaction volume increased by 37%, leading to its valuation of $8.3 billion. This growth was driven by a shortage of funds in the first quarter (Q1) of the year.
MasterCard’s investment in MoMo aims to enhance its capabilities and expand its reach. This would enable MasterCard to integrate its virtual payment services with the MTN wallet, allowing customers to make payments without needing a bank account.
According to Ralph Mupita, MTN Group President and CEO, the agreement would be drafted as a business collaboration on payments and remittances using Mastercard’s technical infrastructure to develop throughout Africa and an investment in a minority share. Bloomberg had noted that the number of shares would be disclosed after the deal was complete.
Mupita added that the firm had a strong result in H1 23 and achieved good strategic progress, even in a challenging macroeconomic environment. He noted that the Group was very encouraged by the increased network availability in South Africa as a result of its investment in power resilience, which led to a better Q2 23 performance than Q1 23.
With this significant investment by MasterCard, the African e-commerce market would open up to people worldwide, positioning Africa as a bright spot in the global economic landscape.
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