Visa and MasterCard are jumping on the mobile payments bandwagon in Africa, a region where consumers are ahead of their counterparts in other parts of the world.
Both financial powerhouses announced their expansion plans, which include partnerships with mobile money service providers, at Mobile World Congress this week in Barcelona.
The African mobile money market is very attractive. The continent has a large population of people who do not have traditional bank accounts, especially in rural areas. It has also has experienced an explosion of mobile money services as operators and banks compete for customers.
The increase in mobile money services has also been fueled by the rapid uptake of mobile phones on the continent, which for many people are their only Internet access devices.
Visa and Airtel, Africa's second largest mobile phone operator, have partnered to provide mobile money services in seven African countries.
Under the agreement, Visa and Airtel will build on the existing capabilities of Airtel's mobile money service. Under the plan, subscribers will be able to use their Airtel money account to pay in stores and online wherever Visa is accepted.
Additionally, customers can withdraw money and make payments from their Airtel money account using their Airtel Money Visa companion card.
The mobile payment service will not only be for use in stores, online and Automated Teller Machines (ATMs), but can also be used to make micro payments, conduct fund transfers as well as purchase airtime and pre-paid electricity and Internet bundles.
Visa and Airtel already offer an Airtel Money Visa card in Kenya but with the new partnership, they are now expected to roll out the services to Gabon, Ghana, Madagascar, Rwanda, Seychelles and Tanzania.
"This agreement with Airtel allows us to give consumers who have previously lacked access to formal financial services secure and convenient ways to pay using their mobile phones," said Vish Sowani, vice president of MNO partnerships for Visa.
On its part, MasterCard announced an agreement with pan-African mobile banking and payment services company eTranzact. The deal will make international remittance services available to millions of consumers in Nigeria which, according to the latest World Bank Migration and Remittances Brief released last October, is the largest remittance market in Africa and the fifth largest in the world, attracting US$21 billion in remittances in 2014 and contributing 4 percent to the country's GDP.
The international remittances will be received through eTranzact mobile money wallets or select bank accounts through the international transfer hub Homesend, a joint venture between Mastercard, eServGlobal and BICS.
HomeSend is an open B2B hub service that enables transfers between end users of different payment service providers. It combines a real-time money transfer messaging platform that processes remittance transactions and and offers an interface with the payment system of the sending and receiving service providers.
ETranzact has operations in Nigeria, Ghana, Kenya, Zimbabwe, South Africa, the Ivory Coast and the U.K..