Mastercard acquired South African-based mobile payments technology firm Oltio from Standard Bank, as it looks to stimulate growth in digital payments via smartphones and other digital channels across the Middle East and Africa.
The credit-card provider said its acquisition of Oltio – whose technology is used to authenticate Mastercard’s Masterpass digital wallet transactions in Southern Africa – would help it scale up its digital solutions offerings in cash-dominated emerging markets across the wider region.
“Too many consumers and merchants in the MEA region are stuck in a cash economy that doesn’t work for them,” said Mark Elliott, division president for Mastercard, Southern Africa. “By combining our joint expertise, technologies and reach, we can bridge the divide between the region’s cash economies and the digital future, bringing the benefits of digital payments to more people and businesses.”
The financial details of the transaction were not disclosed.
The take-up of digital payments in the Middle East and Africa has thus far trailed adoption in markets such as Europe, China and the US, with cash remaining the preferred method of payment for much of the region’s population.
The total transactions value in the digital payments segment in Middle East and Africa is forecast to grow at 14 per cent a year in the coming five years, rising to $78.4 billion in 2022 from around $46.4bn this year, according to forecasts from Statista.
E-commerce giant Amazon last year acquired Middle East online payments gateway Payfort, as part of its acquisition of regional e-commerce firm Souq.
Payfort last month announced it had been awarded a foreign business licence by the Saudi Arabian General Investment Authority to operate as a wholly-owned payments solutions company in the kingdom.
The company last year estimated that the value of electronic payments in the kingdom is expected to double in the next four years to reach more than $22bn.