Visa joins African fintech company Moniepoint as a new investor. The merchant bank and payments platform confirmed to TechCrunch that it has secured a "strategic investment" from the global payments giant, as both companies look to drive financial inclusion and support the growth of small and medium-sized enterprises (SMEs) in Africa.

The fintech company, which announced a $110 million investment last October, received more than $10 million in investment from Visa, sources close to the deal said. The fintech company's Series C funding now stands at more than $120 million, sources said, and the company is reportedly in talks with other investors and could attract more funding in the coming months while maintaining its $1 billion USD valuation. Moniepoint declined to comment on the size of the Visa check or interest from other investors.

Moniepoint provides bank accounts, credit, payments and other financial tools to businesses and individuals through an app and agent network. The fintech company currently processes more than 1 billion transactions per month, with total payments reaching $22 billion, a growth of more than 25% in less than three months. Its meteoric rise began in early 2023 during Nigeria’s central bank’s cashless drive and has continued steadily to become a key player in shaping the future of digital payments in the country.

Moniepoint represents only a small portion of the overall market. Nigeria’s digital payments market spans multiple channels including electronic transfers, ATMs, POS devices, mobile agents and online payments. Businesses and consumers completed approximately $400 billion worth of transactions in 2023, according to data from the country's interbank payment switch. Electronic transfers powered by instant payments network NIP - comparable to India's UPI and Brazil's Pix - dominate the market, accounting for nearly 90% of such transactions, according to Stears. Other channels, such as mobile agents, ATMs and point-of-sale systems, lag far behind.

While Moniepoint operates across most of these channels, Visa’s investment highlights the fintech’s position and potential as a major issuer and acquirer in Nigeria’s credit card value chain.

"We are operating in Nigeria today with leading positions in commercial acquiring and consumer banking," CEO Tosin Eniolorunda told TechCrunch. “With Visa as our investor, we can strategically collaborate to continue to grow the payments ecosystem and expand to more countries, which is a key goal for us.”

Eniolorunda said one way the companies are looking to "grow the payments ecosystem" is by introducing contactless payments. "The central bank has expressed the need to promote contactless services to improve accessibility and enable small transactions. These are our expectations from the partnership. This is progress in the right direction."

The Central Bank of Nigeria has demonstrated its latest intention to drive the adoption of contactless payments through the 2023 Draft Transaction Limit Guidelines. However, implementation will depend on clearer regulations and addressing issues related to privacy, security and trust. Once resolved, contactless payments are likely to significantly increase transaction volumes and could overtake other payment methods in the country.

Visa notes that globally, contactless card usage exceeds mobile wallet usage in many markets. Moniepoint is ideally positioned to lead this transformation in Nigeria, providing contactless payment terminals for businesses and chip cards for individuals, laying the foundation for further adoption.

Moniepoint, on the other hand, will leverage Visa's Cybersource system to better understand transactions. Additionally, it plans to integrate with Visa Direct for remittances and transfers to expand markets within and outside Africa.

Visa has a history of investing in African payments infrastructure, supporting companies such as Interswitch, Flutterwave, Paystack and JUMO over the past decade. Visa is entering the Nigerian SME market with Moniepoint, aiming to digitize payments for them, in part as it looks to increase its share of the country's credit card scheme market. It currently lags behind Interswitch's Verve and Mastercard in terms of cards. The latter two have also begun to enter the field of touch payment.

“Visa’s investment in Moniepoint is the latest example of our long-term commitment to driving the digital economy in Africa,” said Andrew Torre, Regional President, Central and Eastern Europe, Middle East and Africa, Visa. “We will help small and medium-sized businesses expand through innovative payments and software solutions. Scale and open up new revenue opportunities while streamlining operations so even the smallest businesses can thrive. ”

Visa will join Moniepoint's board of directors following the investment. Other notable backers of fintech include Development Partners International, Google Africa Investment Fund, QED Investors and British International Investments (BII), among others. Last week, we also reported that early investor Oui Capital recently returned its first fund after investing in the African unicorn six years ago.