In a significant move to bolster its fintech endeavors, MTN Group Fintech has inked a strategic pact with global payments giant Mastercard, as reported in MTN Group’s half-year 2023 financial report, exclusively accessed by THISDAY.
Empowering Fintech Growth
As part of a calculated strategy to fortify MTN Group Fintech’s trajectory, the telecom powerhouse has forged a partnership with Mastercard. The alliance is designed to expedite and amplify the growth of MTN’s fintech payment and remittance services. This development emerged as a response to the company’s aspiration to identify and integrate strategic minority investors into its fintech domain.
Memorandum of Understanding (MoU)
MTN and Mastercard have formalized their collaboration through a memorandum of understanding (MoU). This framework encompasses a minority investment by Mastercard into Group Fintech, anchored on an estimated total enterprise valuation of approximately $5.2 billion, accounting for the business’s financial assets and liabilities. This strategic venture aims to fuel MTN’s foray into fintech and escalate its footprint in the payments and remittance sector.
While the definitive investment agreements are on the brink of execution, both entities are in the final stages of customary due diligence procedures. Upon completion of the necessary formalities, the culmination of the investment will be subject to customary closing conditions, as underscored by MTN Group’s financial statement. This concerted effort aligns with MTN’s commitment to diversifying its portfolio and embracing digital financial solutions.
Elaborating on the specifics, MTN Group Fintech’s exceptional performance in the first half of 2023 was underscored. A remarkable 37% surge in transaction volume, amassing 8.3 billion transactions, was observed during this period, facilitated by an impressive active user base of 61 million MoMo customers.
Discussing the financial landscape, MTN Group’s revenue demonstrated noteworthy growth, witnessing a 15% increase to nearly R108 billion in constant-currency terms. This ascent was propelled by a 24% surge in data services revenue and a corresponding 22% surge in fintech services revenue. Furthermore, the strategic investments in networks and platforms persisted, exemplified by a substantial capital expenditure of R17.2 billion in the first half of 2023.
Amid this dynamic landscape, Ralph Mupita, MTN Group President and CEO, lauded the company’s performance, acknowledging the resilience demonstrated against challenging macroeconomic factors. He elucidated the positive operational results achieved in Nigeria and the strides made in enhancing network availability in South Africa. Mupita affirmed the company’s belief in the constructive impact of policy changes in Nigeria and the enduring benefits they portend for the investment environment.