In the face of growing competition for digital payments, Visa is looking to strengthen its transaction processing in Africa. This operational shift promises faster and safer services in the context of increasing fintech and digital competitiveness.
The American Digital Payment Solutions Provider Visa launched its Johannesburg data centre on Wednesday, July 23rd, with the aim of strengthening its presence in Africa. According to some local media, the company is looking to better acquire the African market, which is expected to reach $1.5 trillion by 2030.
The new data centre is part of Visa's three-year R1 billion ($56.7 million) investment in South Africa. This is part of the 2022 billion dollar continental plan. The goal is to enable local processing of some of the transactions over the Visanet network, increasing and ensuring operational speeds while reducing reliance on foreign infrastructure.
“When I look at South Africa, I really think of it as a continental digital leader and innovator. So this data center serves as a springboard for solutions that can be deployed across Africa.”
These investments come amid the acceleration of digital transformation due to increased contactless payments and rapid advances in financial inclusion. According to MasterCard, although internet penetration in Africa is expected to increase by 20% per year, financial inclusion is expected to grow at 6% per year.
However, conquering the African digital payments market presents many challenges. Visa will face growing competition in the dynamic fintech ecosystem, counting around 1,263 startups as of January 2024, according to the European Investment Bank. Players like Flutterwave have recently been licensed by Senegal and Cameroon, MasterCard and several carriers, adding to the already fierce competition.
In 2024, Visa Network processed 233.8 billion transactions worth $13.2 trillion, with net profit of $35.9 billion, up 10% year-on-year.
Source: Agence Ecofin
