Visa continues its push into Africa (V)

Sean MacEntee

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Visa is signing up partners across Africa for mVisa, its mobile payment solution, according to Bloomberg.

The card network has signed up four banks in Kenya, and plans to add partners in Nigeria, Rwanda, Tanzania, and Uganda later this year. mVisa, which launched in India last August, is primarily an in-store payment method, allowing users to pay for goods or services by scanning a QR code on a smartphone or entering a merchant identifier into their feature phones, though it also includes other features. If Visa can onboard users quickly, it could be a major asset for the firm on the African continent.

This could help accelerate the firm’s business in Africa. Africa has never been a major market for Visa — as of June 2016, the firm counted just 321 million payment cards in its Central Europe, Middle East, and Africa (CEMEA) region. For context, that number is under half of Visa’s 826 million US cards.

The firm has struggled to onboard merchants in the region, since many sellers don’t have access to electronic payments, which means that there’s nowhere consumers can pay via card. But mVisa, which eliminates the need for traditional infrastructure, simplifies the merchant acquisition process — in India, 30,000 merchants have already signed on — which could help grow the number of Visa merchants and ultimately cardholders in the region. 

And though mVisa may face hurdles, the product has features that could help convert and onboard users in multiple countries.

• Mobile money is already popular in a number of African markets. In Kenya, mobile money service M-Pesa, which is run by mobile network operator (MNO) Safaricom, is used by over 65% of the country’s population and comprises 70% of noncash transactions. That could make it hard for mVisa to catch on, since Visa would have to focus on converting users. But other countries, like Nigeria, have conditions that are ripe for the wallet’s success and could see easy pickup.
• And mVisa’s differentiating features could help it attract users. M-Pesa and some other mobile money services are confined to a specific MNO, which means that services aren’t interoperable. That could be frustrating to users in fragmented markets that want to make purchases or transfers across providers. mVisa is interoperable, which could help it gain ground, and if the service enables cross-border transactions popularity in other African markets could help it push into places where platforms like M-Pesa already have a stronghold. In addition, the service’s wide variety of features and Visa’s brand appeal could help attract users that might not have been otherwise interested in mobile money.

Visa's presence in Africa is one small piece of the ever-changing payments ecosystem, which includes gateways, processors, card networks, issues, merchants, and more.

Evan Bakker and John Heggestuen, analysts at BI Intelligence, have compiled a detailed report on the payments ecosystem that drills into the industry to explain how a broad range of transactions are processed, including prepaid and store cards, as well as revealing which types of companies are in the best and worst position to capitalize on the latest industry trends.

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• 2016 will be a watershed year for the payments industry. Payments companies are improving security, expanding their mobile offerings, and building commerce capabilities that will give consumers a more compelling reason to make purchases using digital devices.
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