HomeTechnologyMastercard to Buy $5.2 Billion Stake in MTN

Mastercard to Buy $5.2 Billion Stake in MTN

MTN Group Ltd. confirmed on Monday that Mastercard has agreed to purchase a $5.2 billion stake in the company’s financial-technology business. Shares in Africa’s largest mobile telecommunication company rose by 10% on the Johannesburg Stock Exchange following the announcement.

The deal is composed of two parts, MTN Chief Executive Officer Ralph Mupita said on a video call on Monday. It consists of a commercial agreement on payments and remittance in which it is agreed that MTN will leverage Mastercard’s technology infrastructure as it looks to expand its fintech capabilities. The size of Mastercard’s stake in MTN’s fintech business will be determined once the deal is completed, Mupita revealed.

With Africa’s young and tech-savvy population making increasing use of their smartphones for a growing array of activities, a market opportunity has presented itself to Mastercard and MTN whereby the companies can provide this target market with new financial and banking services. Much of the fintech investments to date have been in mobile payment systems.

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