Africa Leapfrogging 20th Century Payment Devices

February 2, 2011

airtel Africa, a mobile phone company with operations in more than a dozen African nations, has teamed with the venerable U.K. financial institution Standard Chartered Bank and MasterCard Worldwide to launch a "virtual" wallet application for mobile telephones. The result is the "airtel 1time Shopping Card," announced today in Nairobi, where plans are to begin making the new phone app available in coming months.

The partners hope the airlel 1time Shopping Card will bring more of Africa's unbanked population into the financial mainstream. Additional roll outs are expected throughout the African continent, pending approvals from national regulatory authorities.

The airtel 1time Shopping Card builds on a closed loop (proprietary) prepaid card program for airtel customers, as well as the global presence of Standard Chartered and the global acceptance of MasterCard-branded payment cards.

"The launch of the airtel 1time Shopping Card should fundamentally change the payments industry not just in Africa, but also across the world," said TS Anil, Global Head for Cards and Personal Loans at Standard Chartered.

"We have been in Kenya for 100 years and have always been at the forefront of introducing new products and services to the market," added Kariuki Ngari, the bank's General Manager for Consumer Banking in Kenya and East Africa. "The virtual card is a unique way of ensuring that our customers can transact in the digital world for the first time without having to carry a piece of plastic."

MasterCard Branded

Initially, the new airtel wallet-in-a-phone application will enable Kenyans to make online purchases wherever MasterCard-branded cards are accepted. The online shopper requests and receives a one-time 16-digit number from airtel, then uses that number to complete the transaction. Once funds have been exchanged, a text messaging detailing the transaction is sent to the shopper's mobile.

"We see mobile payments as an innovative way to let consumers quickly and securely purchase their favorite items in this connected world," said Michael Miebach, Division President for Middle East and Africa at MasterCard. Plus it broadens financial access, he said.

"The global opportunity for mobile payments is large," the three partner companies said in a press statement today. Ditto for Africa, where there are an estimated 400 million mobile phone users in a population that includes about 230 million unbanked households, according to the statement.

53% of adults, worldwide, are unbanked

_{-Financial Access Initiative}