South Africa’s prominent telecommunications company, MTN, has made an announcement revealing that multinational payment processing giant, Mastercard, is set to acquire a minority ownership stake in its fintech division.
In its H1 2023 Group Results presentation, MTN stated, “Mastercard has executed an MoU to initiate a minority investment in MTN Group Fintech.” The company anticipates finalizing the agreements in the near future, subject to customary due diligence and standard closing conditions.
MTN Group Fintech encompasses its mobile service, MTN Mobile Money (MoMo), which boasts a user base of almost 70 million across 17 African countries.
Mastercard’s investment aligns with MTN’s broader strategy of selling up to 30% of its fintech business to external investors. MTN Group expressed its intention to explore further value-enhancing collaborations and investments with strategic partners and long-term investors, aiming to secure up to 30% of MTN Group Fintech, subject to market conditions.
The collaboration between Mastercard and MTN will empower MoMo users to create virtual Mastercard payment cards linked to their MoMo wallets. It will also enable Group Fintech merchants to accept Mastercard payments. MTN, the South African telecommunications company, aims to leverage Mastercard’s extensive network and client base to expand its fintech services.
MTN has stated that the Mastercard investment will be based on a $5.2 billion valuation of its fintech business.
During the first half of 2023, MTN Group’s fintech revenue reached around $520 million, indicating a robust 21.7% growth compared to the same period in the previous year.
The MoMo service by MTN processed a significant 8.3 billion transactions, valued at $135.2 billion, during the initial six months of 2023. The monthly active users of MTN’s MoMo service remained stable at 61 million between H1 2022 and H1 2023.
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