Mono and Mastercard Team Up to Streamline Digital Payments in Africa

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Nigerian open banking startup Mono has joined forces with Mastercard to revolutionize digital payments across Africa. This partnership allows users to make secure and direct bank transfers without the need for cards or USSD codes.

For Mono, this collaboration marks a significant step towards profitability. The startup, already boasting positive gross profit, aims to achieve full profitability by year-end. Their strategy hinges on scaling adoption of their open banking tools, and partnerships like this one with Mastercard are key to achieving that goal.

Previously focused on serving lenders, Mono has broadened its horizons to encompass a wider range of fintech companies, increasing their revenue potential. Prior to this partnership, they collaborated with Nigerian payment giant Flutterwave to offer "DirectPay Pay with Bank," an account-to-account (A2A) payment solution. This option has already processed over ₦5 billion in transactions since its launch in 2022.

Mastercard also benefits from this alliance, aligning with their ongoing efforts to digitize spending in Africa. They've been exploring various non-card payment methods for years, including mobile wallets, contactless payments, and QR codes. In fact, by 2020, over 1 million African merchants were accepting Mastercard QR payments.

Mono's CEO, Abdul Hassan, predicts a future where cards are primarily used for offline transactions. He claims Mono has already connected over 3 million financial accounts across Nigeria, Ghana, and Kenya, and anticipates even faster adoption of A2A payments, especially in Nigeria where QR and contactless payments haven't gained as much traction.

This news might be particularly encouraging for established card networks like Mastercard and Visa. Their efforts to introduce A2A payments in developed markets have faced resistance due to consumer preference for the familiarity and convenience of cards. However, the Nigerian market seems to be embracing this new option, with many merchants offering "pay with bank" alongside traditional USSD and card payments. Hassan attributes this to the perceived ease and security of A2A transactions, along with the benefit of instant settlements.

The success of this partnership with Mastercard strengthens Mono's position as a pioneer in African fintech. Looking ahead, the startup plans to leverage this collaboration to gain wider recognition among consumers. Their current web-based app allows users to monitor which fintech apps have access to their bank details. The long-term goal is to transition this platform into a full-fledged mobile app with additional features, solidifying Mono as a trusted name in African finance.

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