Mastercard Acquires Minority Stake In MTN’s Fintech Business

MTN Group, Africa’s largest mobile network operator, said it has signed a Memorandum of Understanding for minority investment by Mastercard into its fintech business.
MTN also said recently that the signing of the definitive investment agreements would happen in the very near term as it approaches finalisation of customary due diligence.
The deal follows Mastercard’s plans to increase its position in a market where the adoption of new payment channels has spurred new strategic alliances within the ecosystem. While Mastercard continues to pull its weight in the card payment industry, it is struggling to reach the low end of the payment market.
It also comes at a time when MTN and other telecommunication companies with fintech businesses are planning to let them run as independent business units. MTN Group’s shares jumped by 7.41 percent on Monday morning as news of the deal with Mastercard broke.
In a statement, Ralph Mupita, CEO of MTN Group said “We are focused on the continued execution of our Ambition 2025, which remains relevant in the current macroeconomic volatility and presents attractive scope for growth,”
“As we manage the challenges in our operating environment, as well as the near-term impacts on our top-line and margins, we maintain our medium-term guidance.” He added.
The latest deal with MTN is the second one the payment card manufacturer is making in telecom operators heavily invested in the African fintech ecosystem. In 2021, Mastercard and Airtel Africa extended commercial agreements and signed a new commercial framework worth around $100 million, which will deepen their partnerships across numerous geographies and areas including card issuance, payment gateway, payment processing, merchant acceptance, and remittance solutions, amongst others.