Visa expands EAC presence
Global payments firm Visa has increased it focus on the East African Community (EAC), with the opening of a new hub office in Nairobi.
The hub will serve as a platform from which Visa will coordinate work with governments, NGOs and financial institutions to provide formal financial services to the estimated 125 million consumers in the region.
Speaking at the official opening of the new office, Visa Group President of Asia Pacific, Central Europe, Middle East and Africa (APCEMEA), Elizabeth Buse, said the EAC had become a vital market for Visa in recent years, and that the organisation has a comprehensive strategy in place for the market, to deliver on Visa’s vision to grow electronic payment solutions significantly across the region.
Visa was established in Kenya in 1991, where it says it has witnessed good year-on-year growth. Payments volume over the Visa network in Kenya is now USD5 billion, and the company counts 25 local banks as clients, circulating more than 5 million Visa cards. Kenya is expected to generate USD14 million in Visa revenues by 2015.
Buse said that the region’s rising level of trade was driving economic development and promoting competiveness. One area of focus for Visa is to bring secure and reliable financial services to the region’s vast unbanked population which stands at more than 12 million people in Kenya alone, according to the Kenyan Central Bank and National Bureau of Statistics. To do this, Visa is aligning its business strategy to Kenya’s Vision 2030, which aims to transform the country into a middle income economy.
Buse is particularly optimistic about the growth potential in the EAC’s burgeoning mobile transactions market. “Ten years ago, the first mobile payments service in the world went live in Zambia, powered by a Visa company, Fundamo. Mobile payments are now a part of everyday life in sub-Saharan Africa, and nowhere more so than in Kenya and the broader EAC region. The World Bank estimates that 68% of Kenyan adults use a mobile phone for money transactions, the highest in any country in the world. This technology is a not to be missed opportunity to bring the security, convenience and affordability of electronic payments to millions of East Africans who are still unbanked.”
Honourable Robinson Njeru Githae MP, Kenya’s Minister of Finance, underscored the importance of partnership in developing an electronic payments infrastructure in Kenya. “We have a long way to go to reach the majority of the unbanked population to move towards our vision of a middle income economy. We cannot work in isolation and close cooperation between the government, private sector and financial institutions is vital,” he said.
Underlining the need for formal financial services as part of Vision 2030, Buse said that populations excluded from formal financial services are currently forced to piece together an array of costly, risky and inconvenient cash-based solutions to meet their daily needs.
“There is a lot more opportunity for growth in the payments industry in Kenya. This is something from which the banking industry stands to gain enormously and which will in turn lead to higher levels of GDP growth for the whole country. By establishing a permanent presence in Nairobi we are going to be much better able to help our client banks secure that growth,” Buse said.