MTN to sell minority stake in $5.2 billion fintech unit to MasterCard

MTN Group Ltd said MasterCard Inc. agreed to take a minority stake in its financial-technology business, which the company values at $5.2 billion.

The deal will be structured in two parts, including a commercial agreement on payments and remittance that uses MasterCard’s technology infrastructure to expand in Africa and the investment into a minority stake, MTN Chief Executive Officer Ralph Mupita said on a video call on Monday.

The size of the stake will be disclosed when the deal closes, he said.

The memorandum of understanding with MasterCard values the fintech unit at $5.2 billion, MTN said in a statement on its first half results on Monday.

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Use of mobile phones to bridge gaps in services including banking has opened a lucrative and fast-growing space in the fintech sector for wireless carriers.

MTN Nigeria’s Fintech subsidiary MoMo Payment Service Bank (PSB) Limited recorded negative active subscriber’s growth as well as a slump in deposits in the second quarter of 2023.

Active mobile money (MTN MoMo PSB) wallets fell by 100,000 in Q2 to 3.1 million people, while deposit held for MoMo customers slumped by 93.8% to N412 million from N6.68 billion in Q1, 2023 according to data compiled by MoneyCentral.