Visa has agreed to acquire a significant minority equity stake in Interswitch, a technology-driven company focused on the digitisation of payments in Nigeria and other countries in Africa.
The transaction is subject to the relevant regulatory approvals and is expected to close by Q1 2020.
Andrew Torre, Regional President CEMEA, Visa, said: “Africa is a priority region for us, and we continually seek strategic partnerships with local players to further strengthen our leadership position and enhance the payments ecosystem across the continent. This partnership aligns with our global strategy to work with and invest in innovative partners, and we look forward to working with Interswitch to provide new consumer and merchant experiences and support the rapid growth of digital commerce across Africa.”
Visa will join globally renowned investors, Helios Investment Partners, TA Associates and IFC, as shareholders in Interswitch, alongside Company management.
The investment makes Interswitch one of the most valuable African FinTech businesses with a valuation of $1bn.
Founded in 2002, Interswitch disrupted the traditional cash-based payments value chain in Nigeria by introducing electronic payments processing and switching services.
Today, Interswitch is a leading player in Nigeria’s developing financial ecosystem with omni-channel capabilities across the payments value chain, processing over 500 million transactions per month in May 2019.
In 2018, electronic payments in Africa accounted for only 12% of transactions by volume, compared to 54% in Europe and 79% in North America.
Interswitch’s core market, Nigeria, is the largest economy in Africa with a rapidly growing electronic payments market.
In addition to its switching and processing services, Interswitch owns Verve, the largest domestic debit card scheme in Africa with more than 19 million cards activated on its network as of May 2019.
The business also operates Quickteller, a multichannel consumer payments platform, driving financial inclusion across Nigeria with over 270,000 access points, as of 2018.
Interswitch’s unique market capabilities and strong consumer proposition, has enabled it to deliver consecutive years of sustainable profitable growth.
The partnership will create an instant acceptance network across Africa to benefit consumers and merchants and facilitate greater connectivity for communities.
Both parties will also retain their respective independent solutions, and Interswitch will retain its scheme neutral strategy.
Mitchell Elegbe, Founder and CEO of Interswitch, said: “Sub-Saharan Africa is the fastest growing payments market in the world, with growth driven by a young and dynamic population, rapidly evolving consumer behaviour, and an increasing desire for payment solutions that can be accepted across the continent and abroad. I am delighted that Interswitch has formed a partnership with Visa, with whom we plan to drive the next phase of transformation in the African payments landscape.”
Babatunde Soyoye, Helios’s co-founder and Managing Partner, added: “A strategic investment by Visa, the world’s leader in digital payments, into Interswitch is a substantial endorsement of the Company’s expertise in African payments. As an active investor in leading African payments businesses, we see tremendous opportunities to digitise payments across the continent and have worked closely with Interswitch’s management team to build a high quality and scalable platform geared to address some of these opportunities. We look forward to further collaboration with the Company alongside Visa.”