Visa has become a new investor in the African fintech company Moniepoint. The business banking and payments platform disclosed to TechCrunch that it has secured a “strategic investment” from the global payment leader as both entities aim to enhance financial inclusion and foster the growth of small and medium-sized enterprises (SMEs) throughout Africa.
According to sources familiar with the arrangement, Moniepoint— which had announced a $110 million investment last October— has received more than $10 million from Visa. The fintech’s Series C funding round now totals over $120 million, and it is reportedly in discussions with additional investors, potentially raising further capital in the near future while sustaining its billion-dollar valuation, as per insider claims. Moniepoint has opted not to comment on the specifics of Visa’s investment or interest from other backers.
Moniepoint offers both businesses and individuals a suite of banking services, including accounts, credit, payment processing, and other financial tools via an app and an extensive network of agents. The fintech now handles upwards of 1 billion transactions per month, with total payment volumes reaching $22 billion—a remarkable increase of over 25% in less than three months. Its rapid growth began amid Nigeria’s Central Bank push for cashless transactions in early 2023 and has continued unabated, establishing it as a pivotal player in the evolution of digital payments across the nation.
However, Moniepoint captures only a small portion of the overall market. Nigeria’s digital payment landscape encompasses various channels, such as electronic transfers, ATMs, POS systems, mobile agents, and online payments. In 2023, businesses and consumers executed transactions totaling approximately $400 billion, according to the country’s interbank payment switch. Electronic transfers, powered by the instant payments network NIP—akin to India’s UPI and Brazil’s Pix—dominate this market, accounting for nearly 90% of all transactions, as per data from Stears. Other channels, including mobile agents, ATMs, and point-of-sale systems, lag significantly behind.
While Moniepoint operates across most of these platforms, Visa’s investment underscores the fintech’s vital role and potential within Nigeria’s card value ecosystem, both as a principal issuer and acquirer.
“We are currently active in Nigeria, leading the way in merchant acquisition and consumer banking,” said CEO Tosin Eniolorunda (seen above left with co-founder Felix Ike) during an interview with TechCrunch. “With Visa as our investor, we can engage in strategic collaboration to further develop the payment ecosystem and extend our reach into additional countries, which is one of our primary objectives.”
Both companies intend to expand the payment ecosystem by implementing contactless payment solutions, Eniolorunda indicated. “The central bank has emphasized the necessity of accelerating contactless services to enhance accessibility and facilitate micro-transactions. These are some of the advancements we anticipate from this partnership. It represents progress in a positive direction.”
The Central Bank of Nigeria has shown its commitment to boosting contactless payment adoption through the release of draft guidelines concerning transaction limits in 2023. However, the practical application will hinge on clearer regulations and the resolution of concerns surrounding privacy, security, and consumer trust. Once these issues are effectively addressed, contactless payments could significantly elevate transaction volumes, potentially surpassing other payment methods in the nation.
On a global scale, Visa reports that contactless card usage outpaces mobile wallets in numerous markets. Moniepoint is strategically positioned to lead this shift in Nigeria by providing contactless-enabled terminals for businesses and chip cards for consumers, thus laying the groundwork for increased adoption.
Furthermore, Moniepoint plans to utilize Visa’s Cybersource system for enhanced transaction visibility. It also intends to integrate with Visa Direct for remittance and money transfer services as it aims to penetrate markets both within and outside Africa.
Visa has a well-established history of investing in Africa’s payments infrastructure, having supported firms like Interswitch, Flutterwave, Paystack, and JUMO over the past decade. With its investment in Moniepoint, Visa is making its entry into Nigeria’s SME market, seeking to digitize payments for these businesses while aiming to increase its share of the nation’s card market. Currently, it lags behind Interswitch’s Verve and Mastercard, which have also begun to capture opportunities in the tap-to-pay segment.
“Visa’s investment in Moniepoint exemplifies our enduring dedication to fostering digital economies across Africa,” remarked Andrew Torre, regional president for Central and Eastern Europe, the Middle East, and Africa at Visa. “We will empower even the smallest enterprises to thrive through innovative payment and software solutions that enable SMEs to scale while uncovering new revenue channels and optimizing their operations.”
As part of its investment, Visa will join Moniepoint’s board. Other notable investors in the fintech include Development Partners International, Google’s Africa Investment Fund, QED Investors, Lightrock, and British International Investment (BII), among several others. Reports also note that an early supporter, Oui Capital, has recently returned its initial fund after investing in the African unicorn six years prior.
Compiled by Techarena.au.
Fanpage: TechArena.au
Watch more about AI – Artificial Intelligence
