Payment processing company Interswitch Limited is planning to move beyond its core market of Nigeria and expand its offerings across Africa via a strategic partnership with Visa.
Visa is acquiring a significant minority equity stake in Lagos-based Interswitch, making it one of the most valuable African FinTech businesses with a valuation of $1 billion. Other investors in the company include Helios Investment Partners, TA Associates and IFC.
While the details of the investment were not released Sky News reported that sources revealed it was at $200 million for a 20 percent stake.
Founded in 2002 by Mitchell Elegbe, Interswitch introduced electronic payments processing in Nigeria, where cash has always been king. Yet the company is now processing over 500 million transactions as of May 2019, and has expanded its physical presence to Uganda, Gambia and Kenya. The electronic payments market in Sub-Saharan Africa is expected to grow by about 35 percent from 2018 to 2023, with Elegbe calling the region “the fastest growing payments market in the world.”
Nigeria is also the largest economy in Africa. Its point of sale and ATM transactions per adult grew at a CAGR of 94 percent and 59 percent from 2013 to 2018, respectively, and the country’s POS card transactions are expected to grow at a CAGR of 63 percent between 2018 and 2023.
Interswitch first partnered with Visa in 2017 when they worked together to on mVisa, which allows consumers to pay for items by scanning a QR code or entering a merchant number. This latest partnership will create an instant acceptance network across Africa.
Interswitch, which also owns Verve, the largest domestic debit card scheme in Africa, and Quickteller, a multichannel consumer payments platform, also partnered with Microsoft last year on a blockchain-powered supply chain finance solution for SMBs in Nigeria. And in August it announced that Verve cardholders will be able to make payments on Discover’s global network.
There have also been rumors that Interswitch is planning to go public soon after its initial plans for an IPO in 2016 were called off when Nigeria fell into a recession.
“An IPO is still very much in the cards; likely sometime in the first half of 2020,” a source told TechCrunch last month.