Alfred F. Kelly, Jr., Chairman, and Chief Executive Officer-Visa
Africa is crucial to the long-term strategy of Visa, the global digital payments company. Through the years, the company has focused on providing digital commerce access to consumers and sellers across the continent. This led Visa to inaugurate a first-of-its-kind innovation studio in Kenya, making it the sixth such opening after Dubai, London, Miami, San Francisco, and Singapore.
“Sub-Saharan Africa is a fast-growing region with a tech-savvy population. As we continue to grow digital payments adoption in the region, our aspiration is to deepen our collaboration with clients and partners in developing solutions that are designed around the unique needs of Africa,” said senior vice president and head of Visa in Sub-Saharan Africa, Aida Diarra.
As a brand built on technology, Visa has driven the significant technological advancements that make electronic payments what they are today. “We are confident that the innovation studio will continue that legacy and cement Sub-Saharan Africa’s position as a leader in creating out-of-the-box solutions to deal with our most pressing challenges as a region,” said Diarra.
In addition to consolidating its growth drive in Africa, Visa has established a number of innovation labs and partnerships, allowing both local and multinational corporations, as well as governments, to take the lead in establishing such innovation centers in order to develop new products through collaborations and remain globally competitive.
In this interview, Visa’s Chairman and CEO, Al Kelly, details the region’s payment potential and the company’s plans to tap into it.
What is your view of Africa’s place in the global economy, and how important is the continent to Visa?
Africa has the world’s youngest population as well as six of the world’s ten fastest-growing economies, two variables that will have an increasingly disruptive influence on the world’s economic and social trajectory. Africa will continue to see tremendous economic and digital transformation as more people connect to the internet and gain mobile connections, both of which will be accelerated by the COVID-19 epidemic. Everything speaks to Africa’s expanding influence on the global economy.
Africa is central to Visa’s long-term growth strategy. So over years, we have focused our efforts on delivering digital commerce access to both consumers and sellers across the continent. Visa has 11 locations around Africa, including a new office in the Democratic Republic of the Congo that opened this week. We are a genuinely global company with staff throughout the continent that help public and private sector partners. In Africa today, there are over 128 million Visa cards and about two million merchant locations that accept Visa payments.
Even so, cash remains a primary payment option for millions on the continent, leaving many outside the formal financial system and without the kind of security and reliability digital payments offer. We see a tremendous opportunity, particularly in rural communities, to bring secure, reliable, and convenient digital payments to commerce on the continent. We are committed to reaching the many millions of consumers and merchants who have lacked access to the digital economy, welcoming more people into the financial ecosystem, and supporting wider prosperity in the process.
What is your assessment of the strength of Africa’s fintech ecosystem?
Financial technology innovation is key to unlocking sustainable development in Sub-Saharan Africa, and the fintech sector has grown significantly. African digital start-ups raised about $3 billion in the first half of 2022 alone. In the global fintech sector, African companies are establishing an outstanding reputation for innovation. The potential is just immense.
Through relationships throughout the payments sector, we’ve experienced some of this potential firsthand. For example, our partnership with Safaricom, Africa’s top mobile money network, already allows over 24 million M-PESA customers to make eCommerce purchases at Visa merchant locations worldwide.
In Nigeria, we are working with Interswitchto enhance and improve our combined service offering and promote new solutions and products to clients and partners in Nigeria and across other African markets. Paga, another African fintech based in Lagos, has a reach across SSA that will enable account holders to transact anywhere Visa is accepted and help small business owners to digitize their business through payments, point of sale, and access to credit, all via a mobile device.
We remain committed to accelerating the growth of the African ecosystem and continue to strive to be the partner of choice for new fintech and innovators.
How is Visa enabling the growth of innovation across the continent?
We’re continuing to invest in innovation through partnerships, products and solutions and our own business. In April, we opened Visa’s first African innovation studio in Nairobi, Kenya to serve the entire region. The studio has been purpose-built to help Visa clients and partners collaborate, co-create and explore both the future of commerce and the impact new technologies have on the way Africans shop, pay, and get paid. The Innovation Studio is just one of the more recent realizations of our company’s broader vision and purpose: to advance digital commerce and give individuals, businesses, and economies access to the financial services they need to thrive.
We’ve also invested in future innovators through our Visa Everywhere Initiative, a global innovation program and competition for start-ups and fintech companies. In June of this year, more than 1,300 applicants from across Central Europe, the Middle East, and Africa competed and two Nigerian start-ups reached the final five. Technology-driven agricultural start-up, ThriveAgric, a Nigerian company emerged as the overall winner, and CarePAY, another Nigerian start-up, earned the Audience Favorite award.
African governments have undertaken strategies to address the financial inclusion gap. What role does Visa play in advancing this agenda?
Two out of three people in Africa don’t have a bank account, yet nearly half of all mobile money users in the world live on the continent. Despite strong progress, these kinds of stubborn disparities in access to financial services remain.
We believe that the greatest impact comes through public/ private sector partnerships. Visa is committed to working with governments to help advance economies and society. Since the start of the pandemic, we’ve had many examples of successful collaboration launching several community-based programs to help both individuals and small businesses gain access to the digital economy.
Recently, we partnered with Sotra, Cote d’Ivoire’s national transport company, to enable digital payments for transit. Through our collaboration with Bizzoly, O-City, and Ecobank in the Democratic Republic of Congo (DRC), Visa will digitize payments for 1,000 buses of the DRC national bus company (Transco).
Beyond partnerships, and as part of our mission to drive equitable access for everyone everywhere, we have supported financial inclusion efforts by giving grants to organizations across Africa through the Visa Foundation. We have also launched several global initiatives such as, She’s Next, to support female business owners, and Practical Money and Business Skills, a financial literacy program that has helped millions of consumers, small business owners, and potential entrepreneurs address their key financial challenges.
Much more generally, digital payments in and of themselves offer enormous to businesses and economies. Studies show that switching to digital payments boosts GDP by 1% for nations with mature economies, and up to 3% for emerging economies. For small businesses, which form the bedrock of communities throughout Africa, at a conservative estimate, the switch to digital means a 17% increase in revenue. Simply enabling digital payments goes a long way toward creating greater prosperity for all participants in the digital economy.
What does the future of payments in Africa look like?
More and more consumers in Africa are embracing digital payments, particularly through eCommerce, contactless payments, and mobile money. Businesses of all sizes have had to adapt to this clear and certain shift in consumer preferences, and we expect this trend to continue. We’re excited to bring transformative digital technologies like contactless payments to West Africa and have seen an encouraging response in markets like Ghana.
Another area that we are looking at closely is cross-border money movement. These kinds of transactions can represent financial lifelines for millions of families around Africa, often sent from across the globe. Nigeria, for instance, is in the top ten countries worldwide for receiving remittances. We are working with our partners to expand cross-border remittances via Visa Direct, a service that allows a sender to push funds directly to a card or bank account.
While some degree of uncertainty and unpredictability has characterized the past couple of years, one thing is clear: the future of money is digital. At Visa, we’re setting ourselves up to unlock the potential of digital money for economies and businesses the world over. Reshaping payments and commerce more broadly will only further accelerate growth in Africa. We are very bullish on Africa and Visa is excited about playing a role in shaping the future of the continent.
As a leader, how would you describe your purpose?
Great leaders and great companies encourage leadership at every level via words and actions. As leaders, we set the tone for company culture — we define the strategy for growth, allocate and prioritize our capital, we build strong teams, and act as role models. In fulfilling my purpose as a leader, I focus on curiosity, courage, and communication.
Curiosity is about looking around corners, trying to connect dots, asking more questions, and trying to unearth insights. There are always more things to learn, more to do, more ways to do things, and better ways to do things. Curiosity is the key to discoveries — big and small. Curiosity is a way to distinguish yourself and curiosity makes your work more fulfilling.