African Regional Bank, Ecobank, and MasterCard signed an agreement in June which will extend MasterCard’s payment solutions to more than 32 Sub Saharan Africa countries over the next 10 years. Under the terms of the deal, Ecobank will issue MasterCard branded prepaid, debit and credit cards to its customers across its regional footprint following the successful launch of the scheme in Nigeria in 2014. This initiative will allow Ecobank customers to make electronic payments and withdraw cash from ATM’s

The agreement will also see Ecobank roll out MasterCard payment solutions which will expand the number of merchant locations that accept MasterCard payments in the region. This includes providing mobile point of sale devices to merchants to allow them to process card transactions by connecting a smartphone or tablet to a secure card reader. This solution will help to overcome infrastructure and communication challenges that may arise when using traditional POS devices. 

Ecobank will also use this Agreement to boost online commerce for its business and corporate clients using the MasterCard Payment Gateway Service in selected countries. This will extend the security and convenience of electronic payments to e-tailers and consumers who may have previously depended on cash.

The deal will provide MasterCard with a significant coverage in Sub Saharan Africa through Ecobank’s extensive regional coverage and established infrastructure whilst enabling Ecobank to grow its e-commerce business and expand its service offering to retail and commercial clients across Africa.

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CTMFile take: This is an important development aimed at reducing the reliance on cash across the region. However, with bank account penetration across much of Sub Saharan Africa of around 25% of the population (compared to around 95% in Europe) many consumers will still want to use cash. The real benefit may come if this solution could be linked with a mobile phone solution, such as M-Pesa, so that those currently unbanked could use the service via their mobile accounts. (SP)