Mastercard investing R3.8 billion in MTN Fintech

Payments company Mastercard is investing up to $200 million (R3.8 billion) into the MTN Group’s fintech business.

In a statement on Tuesday, 6 February 2024, the telecoms company announced it had signed definitive agreements detailing the transaction with Mastercard on 5 February 2024.

The transaction values MTN Group Fintech at $5.2 billion (R98.82 billion) on a cash and debt-free basis, which would mean Mastercard is taking up a minority stake in the business of about 3.8%,

The proposed transaction was previously announced on 14 August 2023.

MTN said the agreements with Mastercard complemented their larger commercial relationship to support the continued development and growth of technology and infrastructure to drive financial inclusion across Africa.

“This commercial relationship is a key enabler for the acceleration of our fintech business’ payments and remittance services,” MTN said.

MTN added that it would continue to explore opportunities for other value-enhancing partnerships and investments with strategic partners and long-term investors.

MTN’s Fintech business includes its mobile money offering — MTN MoMo — which has ambitious plans to take on South Africa’s traditional banks.

In September 2023, it launched a raft of new features — including a business wallet, streamlined payments, and international remittances — with the aim of providing a low-cost alternative for non-banked customers to share in the benefits of formal financial services.