American card payment giant, Visa is said to be mulling a $200 million investment in Nigeria’s Interswitch Group.
According to a report by Sky News, the deal sum could give Visa up to 20% stakes in Interswitch.
Sky reported that the investment would have way for a London IPO by 2020
Visa is one of the largest card payment company in Africa with over 19 million active subscribers using. Interswitch is an electronic payments and infrastructure companies, with point-of-sale terminals, online consumer payment platforms and its own card, Verve.
The investment from Visa could achieve various objectives for the company. First is the opportunity for Interswitch’s majority owner, Helios Investment Partners to get back some cash after more than 15 years of no major cash back.
It would be recalled that Interswitch planned an initial public offering for 2017 but the company shelved the idea after the company complained that the currency control in place dampened the interest of potential investors in the bookbuild that was to take place before the main IPO.
The investment could also give Interswitch the opportunity to hold its ground and break into new business opportunities in the fintech sector.
Some analysts in the fintech industry are of the opinion that the deal sum might not be very huge considering the size of Interswitch’s balance sheet which is still private till date.
In the first half of the year, China’s Opera Limited made major investment into the Nigerian fintech sector with an investment of $50 million directed into its motorcycle hailing company, ORide, and its payment app OPay.
Currently, Interswitch has Quickteller as its payment app, there are major differences between its business model and that of OPay. While the latter has its own services and other third party services it process payments for, Interswitch only process payments for third party services.