Moniepoint Partners with Visa to Launch Contactless Payment Services

In order to promote financial inclusion and assist small and medium-sized businesses (SMEs) throughout Africa, Visa has made a strategic investment in African fintech Moniepoint.

Visa has become a new investor in Moniepoint, an African fintech. As both businesses seek to promote financial inclusion and aid in the expansion of small and medium-sized businesses (SMEs) throughout Africa, the business banking and payments platform told TechCrunch that it has received a “strategic investment” from the multinational payments giant.

Moniepoint did not reveal the amount invested, but they did confirm the development. According to sources close to the transaction that TechCrunch quoted, Visa made a contribution of more than USD 10 million, increasing Moniepoint’s Series C capital to more than USD 120 million. The business apparently has talks with other investors for possible future funding after reaching a billion-dollar value.

According to people familiar with the transaction, Visa gave fintech, which last October disclosed a $110 million investment, more than $10 million. According to reports, fintech, whose Series C currently stands at over $120 million, is negotiating with more investors and might secure additional investment in the upcoming months, all the while retaining its billion-dollar value. Regarding the size of Visa’s check and other investors’ interest, Moniepoint remained silent.

Through an app and a network of agents, Moniepoint offers banking accounts, credit, payments, and other financial tools to both people and corporations. Nevertheless, despite its recent expansion, Moniepoint only accounts for a small portion of Nigeria’s digital payment business, which in 2023 saw transactions of USD 400 billion over a variety of channels, such as POS systems, ATMs, and electronic transfers. Electronic transfers are the most used technique, making up about 90% of all transaction volumes, according to the nation’s interbank payments switch. In less than three months, fintech has grown by more than 25%, processing over 1 billion transactions per month and totaling $22 billion in payments. Its quick ascent started with Nigeria’s Central Bank cashless campaign in early 2023 and has continued consistently, making it a significant force influencing the nation’s digital payment landscape going forward.

Only a little portion of the market is held by Moniepoint. The market for digital payments in Nigeria includes a variety of channels, such as web payments, ATMs, POS systems, mobile agents, and electronic transfers. The nation’s interbank payments switch estimates that in 2023, consumers and companies transacted for about $400 billion. According to data from Stears, electronic transfers, which are powered by the instant payments network NIP and are similar to Brazil’s Pix and India’s UPI, control the market and account for around 90% of these transactions. Other channels lag considerably behind, including point-of-sale systems, ATMs, and mobile agents.

Visa’s investment underscores the fintech’s position and potential in Nigeria’s card value chain as a significant issuer and acquirer in Nigeria’s card payment ecosystem, even though Moniepoint operates across the majority of these channels. The CEO of the fintech company emphasized that Visa’s assistance will allow for strategic cooperation to expand the payment ecosystem and facilitate Moniepoint’s international development. 

“We are in Nigeria right now, at the top of the merchant acquisition and consumer banking charts,” Moniepoint CEO Tosin Eniolorunda told TechCrunch. “We can strategically work together to continue growing the payment ecosystem and expanding to more countries, which is a key goal for us, with Visa as our investor.” The implementation of contactless payment methods will be one of the collaboration’s main goals.  

According to Eniolorunda, using contactless payments has surpassed mobile wallets in a number of regions worldwide and is one method both businesses plan to “grow the payment ecosystem.” In order to increase accessibility and carry out microtransactions, the central bank has said that contactless services must be promoted. Thus, these are some of the expectations we have for the collaboration. Progress is being made in the correct direction. By offering chip cards to customers and contactless-enabled payment terminals to businesses, Moniepoint hopes to spearhead this shift in Nigeria.

By releasing proposed rules for transaction limitations in 2023, Nigeria’s Central Bank demonstrated its most recent intention to promote the use of contactless payments. Clearer legislation and the resolution of privacy, security, and trust-related concerns are necessary for implementation, nevertheless. Once fixed, contactless payments have the potential to surpass other payment methods in the nation and greatly increase transaction volumes.

Visa reports that in several regions across the world, contactless cards are used more frequently than mobile wallets. By providing chip cards to people and contactless-enabled payment terminals to businesses, Moniepoint is in a prime position to spearhead this shift in Nigeria and pave the way for future uptake.

As fintech grows throughout Africa and beyond, it also intends to connect Visa Direct for money transfers and remittances. Moniepoint, on the other hand, will use Visa’s Cybersource technology to improve transaction visibility. As it seeks to enter markets both inside and outside of Africa, it also intends to interface with Visa Direct for money transfers and remittances.

Over the past ten years, Visa has supported companies including Interswitch, Flutterwave, Paystack, and JUMO as part of its history of investing in Africa’s payment infrastructure. Visa is entering the Nigerian SME sector via Moniepoint, partially to increase its market share in the country’s card program and in part to automate payments for them. At the moment, it trails Mastercard and Verve from Interswitch in terms of cards. Additionally, the latter two have begun to gain traction in the tap-to-pay market.

Andrew Torre, regional president, Central and Eastern Europe, Middle East, and Africa at Visa, stated, “Visa’s investment in Moniepoint is the latest example of our long-standing commitment to advancing digital economies in Africa.” “By providing cutting-edge software and payment solutions that enable SMEs to grow and create new revenue streams while optimizing their operations, we will help even the smallest businesses prosper.”

After its investment, Visa will become a member of Moniepoint’s board. Development Partners International, QED Investors, Lightrock, British International Investment (BII), and Google’s Africa Investment Fund are some of the other well-known supporters in the fintech space. Additionally, we revealed that Oui Capital, an early investor that invested in the African unicorn six years ago, just repaid its initial investment.