MFS Africa’s takeover of GTP – a milestone for African tech

The acquisition will expand MFS's ability to offer payment cards that will connect to customer mobile money accounts, allowing African users to transact more easily with global merchants.

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In a rare and exciting acquisition of a US tech company by an Africa-based firm, digital payments network MFS Africa announced this month that it will acquire Oklahoma-based Global Technology Partners (GTP), a processor of prepaid cards in Africa which works with over 80 banks in 34 African countries.

African Business talks to Filip Nilsson, MFS Africa’s Director of Corporate Development, about what the transaction means for MFS Africa and the continent’s integration into the global ecommerce ecosystem.

How did the acquisition of GTP come about and what is the significance of the deal for MFS Africa?  

If we go back to what MFS is all about, it’s to make borders matter less when it comes to payments to and from Africa. We believe that access to financial services is a strong value proposition for people and businesses on the continent – they have payments problems that we want to solve.  

You’re able to send money in a mobile wallet from Rwanda to Uganda, but what if you want to buy something online, how do you do that?  

Either you make the merchants accept mobile money as a payment method, and you have to go out and convince the global merchants to accept new payment methods. That’s one way, but it’s been tried and it’s not been very successful – there are so many mobile money payment methods and you can’t fit them all on a website.  

The other way you solve it is on the issuing side, so you give a card to every mobile money user and thereby make them participate in the ecommerce ecosystem.  

We tried the merchant side first, it’s difficult, we’re doing it for some large entities such as Spotify and so on – depending on where the user is they have specific payment methods – but it’s not the most scalable way.  

So we’ve looked at it from the other side – we became the first non-bank institution in Africa to get a principle membership as part of Visa.

We have been building out our capability to issue and process cards for mobile money users. We want to connect mobile money users with the card ecosystem. In doing that project over the past year and a half, we started working with GTP as a processor.

We didn’t have that part in the stack – the actual integration into Visa and managing the balances on the cards. So we started working with GTP commercially and we got to know them on those projects.

We were impressed by them as a team, impressed by their technology and the relationships they have across the African bank sector, where they are working with all the top bank brands across many markets.

Their footprint is pretty close to ours, they’re in 34 countries and we are in around 37 so it’s almost a 100% match. It clicked in all the dimensions, and there was discussion around making an investment into GTP. That then evolved to become a takeover, a complete acquisition and absorption into MFS Africa.  

GTP are particularly strong in prepaid cards – will this be a focus area for you?

On prepaid cards you load the card by moving funds from a bank account, as opposed to a debit card payment which goes straight to the bank account. The user experience is slightly different, and while GTP is very strong in prepaid, we are also now moving out with a debit card feature which we believe is an attractive proposition for a lot of operators, so that the mobile money users don’t have to do a step before he or she can use it.

GTP’s reputation comes from the prepaid side, and that’s where they’ve excelled historically, and now they’re introducing the next generation which is debit cards.  

What new opportunities will there be for MFS Africa in the US market? 

We’re thinking more in terms of sourcing transactions, talking to and winning deals with large American merchants – the global brands out of the US – we’ll be closer to them. It would be more commercial synergies we are looking for. There could also be an angle of talent acquisition and finding really good people on the merchant processing side.  

What are the next steps after this acquisition? 

We want to continue to invest in GTP and the offering they have, to make it a complete card processor. To expand the offering and go deeper into existing bank offerings – connecting the MFS Africa Hub, which is about cross-border interconnectivity, to the backend of GTP’s cards, as well as addressing fintechs and mobile wallet operators with the debit card proposition.  

And we want to grow the team closer to the customer base. That’s how we plan to invest in GTP over the next year or so. Last year we acquired BAXI in Nigeria, an agent network, and we’re investing quite a bit into that. When we look at the next 12-24 months it will be consolidating what we’ve done and achieving synergies in the acquisitions that we’ve made. 

Could we begin to see more African tech firms acquire US firms? 

I hope so. I think it was a fairly unique opportunity given that GTP are based out of the US and that’s where the staff is (in Oklahoma), however their business is in Africa. There are not too many companies like that. But I think indeed it would be very exciting for this trend to continue. Let’s see how it goes.

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The interview on this page first appeared in Tech54, the African Business newsletter that takes an incisive look at the continent’s tech scene. Subscribe to the newsletter here.

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