MFS Africa acquires GTP for $34m as it seeks to issue prepaid cards to customers
Pan-African digital payments company MFS Africa is acquiring US-based Global Technology Partners (GTP) in a $34 million cash and equity deal, FT reported today.
There are very few transactions this way; i.e. an African technology company buys out a US-based company. Although this may be considered bragging rights for some, MFS Africa has made this agreement a necessity for its next phase of growth.
MFS Africa’s infrastructure merges fragmented and disparate payment systems across Africa into a single seamless network so individuals and businesses within mobile money ecosystems can transact across borders and borders. currencies. The London-based, Africa-focused company connects over 320 million mobile money wallets in over 35 African countries and 700 corridors.
But despite these cross-border connections, millions of Africans still cannot use their mobile money accounts to pay for subscription services run by international companies such as Netflix and Amazon.
GTP is a developer of prepaid and mobile payment software. According PitchBook, its prepaid and mobile payment platform integrates multiple prepaid cards with a single bank account and allows users to make prepaid payments for online shopping and ATMs. According to the FT report, the acquisition gives MFS Africa a way to issue prepaid cards to its customers so they can perform these tasks.
“It’s mainly for international e-commerce platforms, which are not able or willing to create the user experience that will accept mobile,” said the CEO of MFS Africa. Dare Okoudjou said. He also mentioned that MFS had reached an agreement with Spotify to allow the music subscription company to accept mobile payments from customers in Kenya, Uganda and South Africa.
More than 500,000 customers in over 30 countries use GTP prepaid cards. With the merger of MFS Africa, the total customer base could reach several million, Okoudjou said. The acquisition also helps MFS “expand its business in the United States,” he added.
Unlike other African fintechs that enter new markets on their own, MFS is known for expanding through acquisitions. Fintech, which raised $100 million in equity and debthas taken several of these steps in its bid to become a truly pan-African player — such as its acquisition of Baxi, a banking agent platform – but the purchase of GTS is its first purchase beyond the continent. Other African fintechs such as Chipper Cash and Flutterwave have explored US expansion
The GTP deal is a second victory for the mobile money ecosystem – regarding online payments – in a matter of days. Last week Visa in partnership with Safaricom, the M-Pesa mobile money operator, to launch virtual cards for M-Pesa’s 30 million users to make digital payments globally. Users can activate the virtual card through M-Pesa mobile app or USSD. Previously, M-Pesa users could only make mobile money payments within the platform’s network of 400,000 merchants.