Mastercard Lands Its Own Mobile Payments Provider, Oltio
While we all know that Mastercard is a pretty big force in mobile payments—after all, a credit card is itself a mobile payments mechanism, not to mention one often tied to other mobile payments systems—it never hurts to have a little more ammo on your side. Mastercard made that much clear when it bought Oltio from Standard Bank Group recently, which should give it still more force in the market it helped make.
The terms of the agreement were kept quiet, at last report, but Mastercard’s acquisition of Oltio is actually just the latest step in a long-running process. Mastercard had been working with Oltio for some time, at last report, and Oltio had generated several new technologies in the interim. Technologies Mastercard now owns, like an authentication system. With the system in question, Masterpass digital wallet purchases in South Africa can now be authenticated by a combination of mobile device and bank PIN.
Reports suggest that Mastercard is planning to take that technology, ramp it up considerably, and put it into wider use over much of the region. This will give consumers more user-friendly payment experiences and encourage more use of Mastercard systems.
Mastercard’s Southern Africa division president Mark Elliott noted “Too many consumers and merchants in the MEA region are stuck in a cash economy that doesn’t work for them. By combining our joint expertise, technologies and reach, we can bridge the divide between the region’s cash economies and the digital future, bringing the benefits of digital payments to more people and businesses.”
It’s true that the African market in general has been increasingly warming to mobile payments, so much so that several alternatives have sprung up that don’t require a lot of additional new infrastructure. The Oltio system should do well on this front, though since it targets South Africa, it will likely have the advantage of a little extra infrastructure to work with.
Regardless, putting more development focus on a market that’s clearly sprinting to the fore is a smart idea, and one that will likely help Mastercard make its investment back in a big way. Standard Bank’s loss here is likely to be Mastercard’s gain.