Innovation in financial technology necessary for sustainable development – ​​CEO of Visa

Visa Chairman and CEO Al Kelly talks about the payments landscape in Africa and its future in this interview with Temitayo Jaiyeola

How do you see Africa’s role in the global economy?

Africa is home to both the world’s youngest population and six of the world’s 10 fastest growing economies, two factors that will have an increasingly transformative effect on the world’s economic and social trajectory. As more and more people connect to the internet and gain mobile connectivity, these two changes accelerated by the COVID-19 pandemic Africa will continue to experience significant economic and digital transformation. All this shows the growing role of Africa in the global economy.

For Visa, Africa is at the heart of our long-term growth strategy. Over the years, we have focused our efforts on bringing buyers and sellers across the continent into digital commerce. Visa serves each of the 54 African countries from 11 offices, including a new office in the Democratic Republic of Congo that officially opened this week. We have a truly local business with teams across the continent, supporting public and private sector partners. Today, there are more than 128 million Visa cards in Africa and almost two million points of sale accepting Visa payments.

Even so, cash remains a primary payment option for millions of people on the continent, leaving many people outside the formal financial system and without the kind of security and reliability that digital payments provide. We see tremendous opportunity, especially in rural communities, to bring secure, reliable and convenient digital payments to commerce on the continent. We are committed to reaching the millions of consumers and merchants who lack access to the digital economy, welcoming more people into the financial ecosystem, and supporting greater prosperity in the process.

What is your assessment of the health of the fintech ecosystem in Africa?

Innovation in fintech is key to unlocking sustainable development in sub-Saharan Africa, and we have seen substantial growth in the fintech ecosystem. In the first half of 2022 alone, African tech start-ups raised nearly $3 billion. Companies from the continent are building an enviable reputation for innovation in the global fintech industry. The potential is simply enormous.

We’ve seen some of this potential firsthand through partnerships all around the payments ecosystem. For example, our collaboration with Safaricom, Africa’s leading mobile money network, already enables more than 24 million M-PESA users to shop online at Visa merchants around the world.

In Nigeria, we are working with Interswitch to strengthen and improve our combined service offering and promote new solutions and products to customers and partners in Nigeria and other African markets. Paga, another African fintech based in Lagos, has a reach across SSA that will enable account holders to transact anywhere Visa is accepted and help small business owners digitize their business through payments, point of sale and access to credit, all via mobile. device.

We remain committed to accelerating the growth of the African ecosystem and continue to strive to be the partner of choice for new fintechs and innovators.

What future for payments in Africa?

More consumers in Africa are embracing digital payments, including through e-commerce, contactless payments and mobile money. Businesses of all sizes have had to adapt to this clear and certain shift in consumer preferences, and we expect this trend to continue. We are excited to bring transformative digital technologies such as contactless payments to West Africa and have seen an encouraging response in markets like Ghana.

Another area we look closely at is the movement of money across borders. These types of transactions can represent financial lifelines for millions of families across Africa, often sent from around the world. Nigeria, for example, is among the top 10 countries in the world to receive remittances. We are working with our partners to expand cross-border remittances via Visa Direct, a service that allows a sender to transfer funds directly to a card or bank account.

Although a degree of uncertainty and unpredictability has characterized the past two years, one thing is clear: the future of money is digital. At Visa, we are preparing to unlock the potential of digital currency for economies and businesses around the world. Rethinking payments and trade more broadly will only further accelerate growth in Africa. We are very optimistic for Africa and Visa is excited to play a part in shaping the continent’s future.

Governments across Africa have implemented policies to close the financial inclusion gap. How can these agendas be supported?

Two out of three people in Africa do not have a bank account, yet almost half of all mobile money users in the world live on the continent. Despite solid progress, these kinds of stubborn disparities in access to financial services persist.

We believe the greatest impact comes from public/private partnerships. We are committed to working with governments to help move economies and societies forward. Since the onset of the pandemic, we have had many examples of successful collaboration launching several community programs to help individuals and small businesses access the digital economy.

Recently, we partnered with Sotra, the national transport company of Ivory Coast, to enable digital payments for transit. Through our collaboration with Bizzoly, O-City and Ecobank in the Democratic Republic of Congo, Visa will digitize payments for 1,000 buses from the DRC’s national bus company (Transco).

Beyond partnerships, and as part of our mission to foster equitable access for everyone everywhere, we have supported financial inclusion efforts by providing grants to organizations across Africa through the Visa Foundation . We also launched several global initiatives such as She’s Next, to support women business owners, and Practical Money and Business Skills, a financial literacy program that has helped millions of consumers, small business owners and entrepreneurs. potential to meet their main financial challenges.

Much more broadly, digital payments in themselves offer a lot to businesses and economies. Studies show that switching to digital payments increases GDP by 1% for countries with mature economies and up to 3% for emerging economies. For small businesses, which form the bedrock of communities across Africa, according to a conservative estimate, going digital means a 17% increase in revenue. Simply enabling digital payments goes a long way toward creating greater prosperity for all participants in the digital economy.

How is your company enabling the growth of innovation across the continent?

We continue to invest in innovation through partnerships, products and solutions, and our own company. In April, we opened our first African innovation studio in Nairobi, Kenya to serve the entire region. The studio was specifically designed to help Visa customers and partners collaborate, co-create and explore both the future of commerce and the impact of new technologies on how Africans shop, pay and get paid. The Innovation Studio is just one of the most recent achievements of our company’s larger vision and purpose: to advance digital commerce and give people, businesses and economies access to financial services they need to thrive.

We have also invested in future innovators through our Visa Everywhere initiative, a global innovation program and competition for start-ups and fintech companies. In June this year, more than 1,300 applicants from across Central Europe, the Middle East and Africa competed and two Nigerian start-ups made it to the last five. Tech-focused agricultural start-up, ThriveAgric, a Nigerian company, was the overall winner and CarePAY, another Nigerian start-up, took home the People’s Favorite award.

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