African growth is all about MCommerce – Visa looks to capitalize
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African growth is all about MCommerce – Visa looks to capitalize

Sub-Saharan Africa is undergoing a transformation, as MCommece solutions bring a level of financial agility and security to the continent that is unprecedented. Ethiopia, Africa’s fastest growing economy, is a good example: the country’s GDP is forecast to rise by an impressive 8% in 2019. Ghana’s economy, another outperformer, saw growth of 3.5% in 2016, is on course for 6% growth in 2017, and is forecast to grow by 6.7% in 2017.

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This growth is predicated on the rapid expansion of the continent’s telecommunications industry, and perhaps the most powerful result of that is the rise of MCommerce. Now, digital payment provider Visa is looking to capitalize.

MCommerce is Ecommerce conducted through a mobile phone – digital payments and financial services delivered in smartphone friendly wrappers, like ‘mobile wallets’ that facilitate easier payment services without the rigmarole of signing in and filling out forms, which are still common on desktop solutions. But the range of services these providers can offer goes beyond simply payments, and sub-Saharan Africa, massively underserved by banks, is profiting from it in ways that other parts of the world aren’t.

Visa has just such a solution: mVisa. The company announced earlier this year that it would be expanding this mobile phone application “with lenders in 10 sub-Saharan markets.”

Visa’s share price has appreciated by 43% so far this year


SOURCE: Yahoo Finance

It’s easy to see why. Not only is sub-Saharan Africa suffering a dearth of banks, but the demographics of the continent make it more suitable for MCommerce than perhaps anywhere else in the world. Take fast-growing economies Ethiopia, Ghana, Kenya, Nigeria, and South Africa. Between them, these countries account for 420 million people (around 41% of the continent’s population). But the age of these people skews dramatically young against other nations. The percentage of the population that is fifteen or younger in these countries varies from 28% to 44%. The world average is 25%, the U.S. has 19%, and China has just 17%.

Hordes of young people who grew up with mobile phones and the internet, but no bank. The story could pretty much write itself, and Visa hopes to be a major character in it.


Dominion holds Visa in its Global Trends Ecommerce Fund.

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