Why Visa is Dolling Out $1B for Africa’s Digital Transformation

Why Visa is Dolling Out $1B for Africa’s Digital Transformation

Visa, the world’s leading card payment platform, has announced plans to invest $1 billion in Africa over the next five years to accelerate the continent’s digital transformation.

Alfred F. Kelly, Jr., Chairman, and CEO of Visa announced the plan on Wednesday, December 14, 2022, at the US-Africa Business Forum in Washington, DC, in collaboration with the US-Africa Leaders Summit.

According to a press release, the investment will be used to expand the company’s operations in Africa, as well as to deploy new technologies and deepen collaboration with its partners over the next five years. Merchants, governments, financial institutions (FIs), Fintechs, and mobile network operators are among them.

The inclusion of mobile network operators reflects Visa’s different role in Africa’s payment ecosystem than it does in the United States. Visa collaborates with banks that issue credit and debit cards. Visa’s African operations necessitate collaboration with the continent’s mobile money and alternative payment fintech, which use solutions such as mobile wallets and virtual cards to bring digital payments to unbanked populations.

What Visa’s new investment Means for Africa’s digitalization quest

The investments are also expected to focus on strengthening the payment ecosystem through innovations and technologies, assisting economies in their digitization, and investing in upskilling, talent development, and capacity building.

Visa’s investment, with its structural role in global transactions, could unlock untapped potential for payment digitization on the continent.

While noting that Visa has been investing in Africa for decades to build a truly local business, Kelly stated that the company’s commitment to the continent is unwavering.

Visa pledges to invest $1bn in Africa to accelerate digital transformation - Daily News Egypt

According to Kelly, “Every day, Visa supports digital commerce and money movement in every country across the continent, and Africa remains central to Visa’s long-term growth plans. We look forward to continuing to work closely with our partners to advance the financial ecosystem, accelerate digitization, and build resilient, innovative, and inclusive economies that will create shared opportunity and further spur Africa’s digital economy.”

Emphasizing the need for more investments in digital payments in Africa, he noted that an estimated 500 million people in Africa are without access to formal financial services, less than 50% of the adult population made or received digital payments in Africa, and more than 40 million merchants do not accept digital payments.

Speaking at the forum, Senior Vice President, of Visa Sub-Saharan Africa, Aida Diarra, said “Africa is experiencing an unprecedented digital acceleration, with a growing number of consumers, merchants, and businesses realizing the benefits of secure and convenient digital payments to fuel commerce and money movement. Over the past years, Visa has continued growing our investment in Africa, through new offices, innovations and solutions, and programs that are directly supporting financial inclusion. The investment pledge outlines our long-term commitment to Africa and the work we will do to help advance the financial ecosystem.”

Visa activities on the continent in 2022

Visa claims that less than half of Africa’s adult population has made or received digital payments, and more than 40 million African merchants do not accept them, however, this year alone, the company has entered into multiple strategic partnerships with African startups to fast track digital payments across the continent.

This investment is just one of the ways that the payment giant has been supporting the digital payment transformation of Africa in recent times. You will recall that the company opened its Innovation Studio in Nairobi, Kenya in April this year, as well as announced a partnership in June with Safaricom, East Africa’s biggest telecommunication company and operator of the M-Pesa mobile money product, to launch a virtual card that allows M-Pesa customers to make digital transactions globally. Visa also inked a partnership with Flocash, Africa’s fastest-growing fintech 2022, in July 2022 to promote digital capabilities for African SMEs through digital payments, supplier solutions, and access to financial services.

additionally, last October, the company also announced a strategic partnership with Geidea to bring seamless digital payment solutions to the Egyptian market. Also, Visa announced a partnership with Paga in November 2022 to launch Paga’s Naira virtual and physical cards (Paga card).

The African wave of non-banking financial institution digital transformation is accelerating the continent’s quest for financial inclusion by making financial services available to the unbanked. This will further deepen the drive for the adoption of digital payment options which will ensure an all-inclusive financial future that will be welcoming and beneficial to both residents and investors in the continent.