MasterCard targets Africa governments in new growth strategy

Monday October 12 2015

Devolution and Planning Cabinet Secretary Anne Waiguru, Kenya Revenue Authority Commissioner-General John Njiraini (left) and Mr Daniel Monehim, MasterCard's president for sub-Sahara Africa division, display the Huduma Card after its launch at Harambee House, Nairobi, on August 26, 2015.

Devolution and Planning Cabinet Secretary Anne Waiguru, Kenya Revenue Authority Commissioner-General John Njiraini (left) and Mr Daniel Monehim, MasterCard's president for sub-Sahara Africa division, display the Huduma Card after its launch at Harambee House, Nairobi, on August 26, 2015. PHOTO | CORRESPONDENT NATION MEDIA GROUP

By LILIAN OCHIENG'
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MasterCard has heated up the competition in the cashless payment field as it now seeks to rely on key government projects in West and East Africa to grow its emerging markets revenue.

MasterCard recently won a government contract to design the Huduma Card, which will be used for paying State services.

Nigeria, Africa's most populous country, uses a MasterCard-branded national identity card, which also serves as a payment card.

This gives MasterCard access to over 170 million people living in the oil-rich country. Only 30 per cent of Nigeria's population have a bank account, according to the World Bank.

AFRICA GROWTH STRATEGY

In an interview with the Nation, MasterCard's sub-Saharan Africa executive Daniel Monehin revealed that after small-scale retail stores, governments are key to the company's growth strategy in Africa.

“The business needs public-private partnerships to make financial inclusion actionable and sustainable. Governments are rapidly driving the conversion from cash to electronic payments, this is the next frontier of unexplored growth,” said Mr Monehin.

This strategy is seen as a fresh approach among card payment options such as Visa, which competes with MasterCard.

Both card operators have in the past inked deals with local banks to tap into billions of shillings passing through small businesses in financial institutions by using plastic money.

VISA STRATEGY

Visa’s general director for sub-Saharan Africa, Mr Jabu Basopo, said its strategy targets small-scale retailers and schools with their card payment technology.

As Visa takes its schools and retailers approach, MasterCard is banking on government deals.

Kenya is expected to launch its Huduma Card in December or early next year, while Nigeria launched the branded ID cards late last year.

In Egypt, MasterCard has experienced great success with the prepaid government payroll card. The card is used by over 10 million Egyptian government workers.

Additionally, the South African Social Security Agency delivers government funds to over 10 million MasterCard debit cards each month, empowered with biometric identification technology for additional security. 

Economic analyst Karithi Murimi said MasterCard’s new strategy stands unchallenged by its competitors, adding that the US-based firm will shore up its emerging markets revenue by a great margin as the card usage is integrated into government systems.