Battle of the electronic payment juggernauts
The Nigerian payments space has the two biggest electronic payment rivals going toe-to-toe in the market. Visa and Mastercard, two of the largest companies in the world, each with market capitalisations of multiple hundred billions of dollars, have been making investments in Nigeria in an attempt to complement their core business and increase their exposure to Africa’s largest economy. Between the two companies they have made four investments in the payments sector in Nigeria, in-keeping with similar investments made in other large emerging markets operators.
It is estimated that the number of cards issued in Nigeria by December 2019 was over 20 million and monthly volume of transaction. This is notwithstanding generally low activity rates: it is estimated that 50% of cards are inactive. This indicates a tremendous opportunity to improve the volume and value of transactions within the banked population, which still disproportionately uses cash for transactions, as well as the untouched, unbanked market. Mastercard leads in the card point of sale (POS) market in Nigeria according to NIBBS whilst VISA is number one globally.
Mastercard also recently announced an investment in Pine Labs, one of Asia’s leading merchant commerce platforms as part of their global growth strategy. The investment follows a USD 300 million investment in 2019 in Network International – a leader in the Middle East and Africa in helping retailers accept cards as a payment method both in the physical world and online.
Source: TechPoint, NIBBS, Mastercard, EFInA