Visa has acquired a minority stake in Nigerian fintech Interswitch in a deal to further advance digital payments across Africa.

The investment makes Interswitch the most valuable African fintech with a valuation of $1bn. Visa joins investors, Helios Investment Partners, TA Associates and IFC, as shareholders in the payments processor.

Mitchell Elegbe, founder and chief executive of Interswitch, said: “Sub-Saharan Africa is the fastest growing payments market in the world, with growth driven by a young and dynamic population, rapidly evolving consumer behaviour, and an increasing desire for payment solutions that can be accepted across the continent and abroad.

“I am delighted that Interswitch has formed a partnership with Visa, with whom we plan to drive the next phase of transformation in the African payments landscape.”

In 2018, electronic payments in Africa accounted for 12% of transactions by volume, compared to 54% in Europe and 79% in North America. However, this volume is expected to grow at a CAGR of 35% in Sub-Saharan Africa from 2018 to 2023.

In addition, POS card transactions in Nigeria are set to rise at a CAGR of 63% between the same time period.

Africa: a priority region

Andrew Torre, Regional President CEMEA, Visa, said: “Africa is a priority region for us. We continually seek strategic partnerships with local players to further strengthen our leadership position and enhance the payments ecosystem across the continent.

“This partnership aligns with our global strategy to work with and invest in innovative partners, and we look forward to working with Interswitch to provide new consumer and merchant experiences and support the rapid growth of digital commerce across Africa.”

The new partnership aims to create an instant acceptance network across Africa to benefit consumers and merchants. It also hopes to facilitate greater connectivity for communities.

Babatunde Soyoye, Helios’ co-founder and managing partner, said: “A strategic investment by Visa, the world’s leader in digital payments, into Interswitch is a substantial endorsement of the Company’s expertise in African payments.

“As an active investor in leading African payments businesses, we see tremendous opportunities to digitise payments across the continent. We have worked closely with Interswitch’s management team to build a high quality and scalable platform geared to address some of these opportunities. We look forward to further collaboration with the Company alongside Visa.”