Aside from its acquisitions, MFS Africa has also entered partnerships with other fintechs including Fincra.
African mobile money wallet aggregator MFS acquires US firm in a rare deal
In a massive shift from the norm in the fintech space in Africa, MFS Africa, a payment company that provides mobile money services across the continent, has acquired US-based fintech company Global Technology Partners (GTP) in a $34 million cash and stock deal.
MFS Africa runs a mobile money system that connects the fragmented payment schemes across Africa, allowing transactions across borders and currencies with more than 320 million mobile wallets across more than 35 African countries and 700 corridors. It is the biggest mobile money wallet aggregator in Africa.
This acquisition is a first of its type in the African fintech sector, which has enjoyed enormous funding from foreign investors and even companies, as in the case of Paystack’s acquisition by American payment giants Stripe. A ‘rare purchase‘ was how FT described MFS Africa’s acquisition of GTP, a software developer for prepaid and mobile payments.
How will it work?
GTP’s prepaid and mobile payment software integrates multiple prepaid cards with a single bank account and allows users to make prepaid payments for online shopping and ATMs. With this acquisition, MFS Africa wants its mobile money users who do not have bank accounts to access prepaid cards. With these prepaid cards, these users can access products and services from international companies like Netflix and Amazon, which do not accept digital money payments from Africa.
With his acquisition, MFS Africa is banking on the growing needs for international products like Netflix, Amazon and global e-commerce platforms. But with mobile money prevalent in so-called under- or unbanked areas, mainly rural, are users in these areas the target market for these international products and services?
Also, MFS Africa has made a deal with Spotify to allow the music subscription company to accept mobile payments from customers in Kenya, Uganda and South Africa. Does this type of partnership need expansion instead of the acquisition of GTP to provide prepaid cards for similar products?
On the other hand, this expands the access to financial services to the typically unbanked, improving financial inclusion on the continent.
MFS Africa is not the only African fintech trying out this strategy. Safaricom’s M-Pesa, Africa’s most successful mobile money service, recently partnered with Visa to launch virtual cards for M-Pesa’s 30 million users to make digital payments globally, expanding from its mobile money payments product.
MFS Africa sees this acquisition necessary for its next growth phase, hoping to use the over 500 000 customers in over 30 countries who already use GTP prepaid cards to reach several million more with the merger. The acquisition also helps MFS “expand its operations in the US”, according to the CEO Dare Okoudjou.
This acquisition is not MFS Africa’s first while expanding into new territories by acquiring another company. Since 2016, the London-based Africa-focused MFS has made four acquisitions to strengthen its network in East and West Africa and the United States.
MFS’s first acquisition was in July 2016 when it acquired Sochitel, an international airtime top-up provider across Africa. In June 2022, MFS Africa acquired Beyonic, a Ugandan fintech startup which provides digital payments services for small and medium-sized companies and fintechs. There was another acquisition in 2021, this time of Nigerian digital solutions and distribution company Capricorn Digital under its SME-focused brand Baxi. The 100% cash acquisition was to expand into Nigeria, Africa’s largest economy.
Aside from acquisitions, MFS Africa has also entered some partnerships like the aforementioned with Spotify. In December 2020, it partnered with PayPal’s Xoom to allow Xoom customers in Europe and North America to send money to Africa. Okoudjou has several times spoken of working on a project to connect its gateway with China to facilitate trade.
Fincra and MFS Africa
Talking about partnerships, Fincra also has a partnership with MFS Africa to offer more currency for Payouts for our customers. Fincra’s customers have more currency options to make payments with his collaboration.
Fincra has integrated MFS Africa’s API to facilitate Payouts for merchants. Aside from widening the range of currencies for merchants’ payouts, this partnership also increases the payment methods for Fincra merchants.
Fincra customers will be able to make payouts into bank accounts, cash options and mobile wallets. With MFS Africa, Fincra is making it easy for merchants to make payouts in several African countries.