The world’s two major payments companies, Visa and MasterCard, are both growing their respective footprints in the East African region.[hidepost=9][/hidepost]
Earlier this month, MasterCard launched its East African headquarters in Nairobi, Kenya, bringing its total number of offices on the continent to five. Other offices are located in Cairo, Casablanca, Lagos and Johannesburg.
MasterCard said that the Nairobi office will serve as its liaison office for customer banks and business associates in the entire East African region, including countries such as Kenya, Tanzania, Uganda, Mauritius and Ethiopia.
“East Africa, and indeed Africa as a whole, has always been heavily reliant on cash – both in the consumer and corporate sectors,” commented Charlton Goredema, vice president and market manager for East Africa and Indian Ocean Islands for MasterCard Worldwide. “This dependence is costly – the costs of printing notes and keeping them secure are significant – and cash payments restrict an individual or company’s economic activity to their immediate geographic area.”
MasterCard said it is working to develop payment solutions that are relevant for the local market. An example of this is PayOnline, a virtual card that operates off a mobile wallet, launched in collaboration with mobile operator Airtel and Standard Chartered Bank. PayOnline allows Airtel subscribers to shop online, even if they don’t have a bank account.
MasterCard’s competitor Visa is, however, not sitting on the sidelines. Towards the end of 2011, Visa announced a partnership with the Rwandan government to electronify financial services in the East African country. Visa will work together with the government of Rwanda to develop the infrastructure required for electronic payments and to promote electronic payments innovation.
Elizabeth Buse, Visa group president for Asia Pacific, Central Europe, Middle East & Africa, said she expects mobile payments to play an important role in the company’s strategy in Rwanda. “We need to capitalise on mobile technology that will allow us to reach people who are underserved today.”
In other related news, it was this week announced that Ecobank has become the first bank in Kenya to roll out CHIP technology for all its Visa debit card products. According to the bank, CHIP cards offer high level security due to an embedded microprocessor that enables customers to carry out transactions at ATMs and point of sale (POS) in a more secure way.
Ecobank said in a statement that statistics show Kenyans are increasingly opting to use debit and credit cards as a preferred means of settling payments, with over 4.5 million debit cards currently issued in Kenya.