Visa turns to investment to extend African reach
Visa has purchased a minority stake in Nigerian payment processor Interswitch, giving the card brand deeper access to nearly two dozen nations on the continent.
The size of the investment was not disclosed, though Sky News reports Visa is spending $200 million in return for a 20% stake in Interswitch. The deal makes Visa a major investor ahead of Interswitch's prospective IPO in London during the first half of 2020. Interswitch says Visa's investment boosts its valuation to about $1 billion.
Visa's move follows a similar purchase from Mastercard, which in March announced it would invest $300 million in Network International’s London IPO for a 9.99% stake. Network International’s IPO in April valued the company at £2.2 billion (about $2.8 billion).
Interswitch sells payment processing in 23 countries across Africa, including Nigeria, Uganda, Gambia and Kenya, according to TechCrunch. Interswitch also owns Verve, which is the largest domestic debit card scheme in Africa with more than 19 million cards on its network as of May 2019. Verve is expanding globally, supported by a deal to run on the Discover Global Network.
Other services include Quickteller, an online and mobile app payments platform supporting P2P, bill payments and e-commerce transactions. Quickteller processed more than 42 million transactions monthly as of July 31, 2019 with a payment value of US$1.5 billion through direct, indirect and Paypoint channels.
According to Crunchbase, a website that tracks capital investments in private companies, Interswitch had raised a total of $10.5 million in funding in two rounds before the Visa investment. Investors in those rounds included Helios Investment Partners, Adlevo Capital and TA Associates.