Joining with the government of Rwanda, VISA will try to increase its business interactionthroughout Rwanda.
Visa Inc., seeking to spread cashless commerce in Africa, will unveil Monday a partnership with the government of Rwanda to expand its business in the country.Under the agreement, a partnership with Rwanda’s central bank and a new office in Kigali will allow Visa to process transactions in Rwandan francs. Visa will also expand its network of ATMs and businesses that accept Visa’s cards in Rwanda. In addition, it will train Rwandan officials in financial management, with an eye toward handling payments between the government and its vendors and employees. The government is helping Visa open its office, and invited it to test new services in the country. The agreement aims to get Visa’s cards into the hands of average Rwandans, many of whom don’t have bank accounts. The pact will also help test appetite in the last largely untapped financial services markets in the world: Africa. “We’re doing it in Rwanda in hope of being able to export whatever works to other African countries,” Elizabeth Buse, Visa’s group president for the Asia-Pacific region, Central Europe, the Middle East and Africa said in an interview. Consumer-product companies are stepping up business in Africa, eager to access a budding middle class. Given the continent’s fast growing population, Africa’s middle class could exceed one billion people by 2060, according to the African Development Bank. Visa has partnerships with major hotels and tour operators across sub-Saharan Africa and offices in Kenya, South Africa, and Nigeria. Visa says most of its business in emerging markets like Rwanda is in debit and prepaid transactions, rather than credit, forgoing the need for a credit check to access its services. Meanwhile, MasterCard Inc. has offices in the same three regional powerhouses. MasterCard also allows customers of Airtel Kenya to make payments over their mobile phones without a physical credit card or a bank account. And last month MasterCard struck a deal with the Togo-based Ecobank Group to offer its cards and payment services at the bank’s branches in more than 30 sub-Saharan African countries. “We see the growth potential in these markets for many years,” said Michael Miebach, MasterCard’s president for the Middle East and Africa. Rwanda lost nearly a million lives in a genocidal conflict in 1994, but it is now among Africa’s most dynamic economies. The landlocked country of 11 million people is set to grow 7% this year, well ahead of the 5% growth projected for sub-Saharan Africa, according to a forecast from the International Monetary Fund. The Rwandan government has worked at cutting red-tape for business and attracting foreign investors. “We’re looking for every possible partnership with the private sector,” said John Gara, head of the Rwanda Development Board, a government agency set up to ease foreign investors’ entry into the country.
Traveled to Rwanda and from my first hand experience(s), the number of consumers is definitely growing. With such growth of consumers, credit card companies like Visa have clearly noticed this African emerging market.