MasterCard and Visa have their sights set on expanding their credit card businesses and are targeting consumers in the largely unbanked country of Africa. MasterCard recently partnered with the pan-African banking group Ecobank in the hopes of putting credit cards into the hands of new users in some 30 African countries, while Visa has set up shop in Rwanda to provide new financial service products to a portion of the county`s 11 million residents. Currently fewer than 100,000 Rwandans are credit card holders.
“Our goal is the 86% of Rwandan citizens who do not have access to banking services,” said Elizabeth Buse, group executive for Visa International, according to the online publication Middle East North Africa Financial News.
Likewise, Michael Meibach, president of MasterCard`s Middle Eastern and African division told the Middle East North Africa Financial News, “Increasing the acceptance of MasterCard throughout Africa is a key objective for us.”
Credit card companies are recognizing the importance of the financial inclusion of the unbanked consumers of Africa. Such untapped potential is especially meaningful in today`s ever-changing international economic climate. Both firms have essentially “reached a plateau of revenue collection” in Western countries and are turning to emerging markets in the hopes of generating new revenue.
For example, currently 57% of Visa`s revenue stems from North America. By the year 2015, however, the company intends to generate over half its income from elsewhere in the world.
Visa`s senior executive for Singapore, Rene Ho, revealed, “We are looking at economies in Asia such as Japan, but are also turning to emerging markets,” as reported by the Middle East North Africa Financial News.
Mobile banking presents another potentially lucrative opportunity for both Visa and MasterCard. It has become the most important driver of financial inclusion, unsurpassed by other technological advances. Estimates indicate that over the past decade well over 100 million people across the globe have accessed some sort of financial services via their mobile phones. The number of unbanked consumers in possession of mobile phones is predicted to reach 1.7 billion by next year, according to data released by Electronics Payment International.