Safaricom’s M-Pesa, Visa offer virtual card for global transactions

PUBLISHED: Fri, 03 Jun 2022 10:42:47 GMT
Duncan Miriri
Reuters
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A pedestrian wearing a protective face mask passes a Safaricom Plc store in central Nairobi, Kenya, on Tuesday, May 11, 2021. Revenue from M-Pesa, Safaricom’s mobile-money service, is expected to grow after more customers have adopted cashless transactions during the coronavirus pandemic. Photographer: Patrick Meinhardt/Bloomberg via Getty Images

NANYUKI, Kenya, June 2 (Reuters) – M-Pesa, the mobile phone-based African money transfer service owned by Kenya’s Safaricom Plc SCOM.NR, and Visa Inc V.N launched a virtual payment card on Thursday in a bid to capture some of the continent’s $40 billion-a-year subscriptions market.

The M-Pesa Global Pay Visa Virtual card will allow users to securely pay 100 million foreign merchants like Amazon and Alibaba from their mobile phones, without the need for credit cards or accounts with processors such as PayPal.

The virtual card is also targeted at the fast-growing subscriptions markets in Africa for services like Netflix NFLX.O and Spotify SPOT.N, said M-Pesa Africa Managing Director Sitoyo Lopokoiyit.

The virtual card is initially available to more than 30 million M-Pesa users in Kenya and will be rolled out to Tanzania, where testing is going on, Mozambique, Congo, Lesotho and Ghana by April 2023, Lopokoiyit said.

Read more: Kenya’s central bank tests public opinion about digital currencies

M-Pesa launched 15 years ago as a simple money transfer service and now accounts for roughly half of Safaricom’s revenue as consumers use it for purchases, savings, borrowing and insurance. Safaricom is partly owned by South Africa’s Vodacom Group VODJ.J.

“A lot of M-Pesa customers today don’t have bank accounts… it (the virtual card) is a catalyst for e-commerce and digital payments,” said Visa official Alex McCrea.

Transactions will be subject to the M-Pesa platform’s limits in the local Kenyan currency of 150,000 shillings ($1,285) for a single transaction and a daily limit double that. Users will be able to use the virtual card while travelling abroad.

Transactions on the virtual card will be secured with a unique security code sent to the user’s mobile phone and the user’s M-Pesa personal identification number.

($1 = 116.7500 Kenyan shillings)

(Reporting by Duncan Miriri; Editing by David Holmes and Cynthia Osterman)

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