Mastercard Offers $200 Million Investment To Mtn’s Fintech Business

By Clement Alphonsus

Six months after Mastercard has disclosed its plans to acquire a minority stake in MTN financial technology arm, MoMo, the payment firm has concluded the acquisition.

MTN noted that it has signed a “definitive agreement” with Mastercard for a minority investment of up to $200 million (R3.8 billion) into MTN Group Fintech at a valuation of $5.2 billion (R99 billion) on a cash and debt-free basis.

The telecommunications firm further stated that the transaction, which is non-categorized in terms of the Johannesburg Stock Exchange (JSE) listings requirements, was originally announced on August 14, 2023, and is subject to customary closing conditions.

According to its interim financial results for the six months ended June 2023, MTN, Africa’s biggest mobile operator, has disclosed that its fintech business has been flourishing, with revenue growing by 21.7 per cent year-over-year, primarily due to growth in the wallet (+20.7 per cent), payment and e-commerce (+54.9 per cent) and remittance (+78.9 per cent) industries.

The Mastercard transaction becomes significant as MTN Group seeked to expand its fintech business, putting the telecoms company on a solid footing, as it prepares to separate its financial services division.

According to the firm, “This commercial relationship is a key enabler for the acceleration of our fintech business’ payments and remittance services.

“MTN will continue to explore opportunities for other value-enhancing partnerships and investments, subject to market conditions, with strategic partners and long-term investors."

The telecommunications firm can be said to be the largest operator in Nigeria both in subscriptions and market penetration.

MTN as of 2023, with about 290 million subscribers, operates in 21 countries, including Cameroon, Côte d’Ivoire, Ghana, Guinea Bissau, Liberia, Benin, Nigeria, Rwanda, South Africa, Sudan, South Sudan, Swaziland, Uganda, Yemen, Zambia, Afghanistan, Iran, Syria and Cyprus, among others.