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Rapid Growth and Optimism in Africa’s Digital Payment Sector

The $100 million investment from global payments giant Mastercard in the mobile money business arm of Airtel Africa values the subsidiary, Airtel Mobile Commerce, at $2.65 billion. It follows a $200 million investment in the company by TPG’s Rise Fund just two weeks ago. Both TPG and Mastercard now have minority stakes in the company. Airtel Africa is a London-headquartered company operating in 14 African countries. The deal shows that major African telcos are looking to spin off their mobile money platforms as a way to accelerate growth, says George Bodo, the CEO of Callstreet Research and Analytics, a Kenya-based investment and market research platform. Just last month, South Africa’s MTN said it was considering spinning off its financial services unit and potentially listing it to unlock value in its core business. Another implication, Bondo adds, will be a growing convergence between mobile wallets and cards, as more card payment platforms seek to onboard mobile wallets. Last year, Safaricom, a Kenyan mobile network operator, partnered with the payment processing company Visa to enable the development of products that will support digital payments for customers of M-Pesa, the company’s mobile money service.