Visa Inc., the world’s biggest bank- card network, agreed to help develop Rwanda’s payments system and connect the African nation’s 11 million citizens to the global economy as the firm pushes to boost non-U.S. revenue. (V)
The company will modernize the nation’s payments network under an accord with the government, working with partners to upgrade automated teller machines, install merchant card readers, develop e-commerce capabilities and provide financial education, said Elizabeth Buse, Visa’s group president responsible for most business outside the Americas.
“It’s absolutely critical that you start with the government if you are going to have the full pyramid of payments services,” Buse, 50, said in a phone interview. “Our intent is to take what we are doing in Rwanda and repeat it across” other developing economies, she said.
The project may help Chief Executive Officer Joseph W. Saunders, 66, fulfill his goal of generating more than half of Visa’s revenue outside the U.S. by 2015. Last month, the company announced a plan to create prepaid accounts linked to mobile phones across Africa and the Middle East as it aims to capture transactions from so-called unbanked consumers.
Visa chose Rwanda, where 86 percent of the population lacks access to traditional financial services, because of its friendliness toward private enterprise, stable regulatory structure and smaller population, Buse said.
“In all economies, well-developed financial systems are essential for sustained economic growth,” National Bank of Rwanda Governor Claver Gatete said in a statement today. “The partnership between the government of Rwanda and Visa is an opportunity to increase efficiency and inclusion through the use of electronic financial services.”
Rwanda’s economy, recovering from the 1994 genocide that killed about 1 million people in 100 days, is forecast by the central bank to grow 8.8 percent this year. The economy doubled in the nine years through 2010, according to the World Bank.
U.S. Ambassador to the United Nations Susan Rice has criticized Rwanda’s “comparatively closed” political culture and said the East African nation should take steps to broaden democracy. Restrictions on the media, harassment of activists, opposition figures and journalists as well as the disappearance of some of them pose the “next developmental challenge” for the country, Rice said in a Nov. 23 speech at the Kigali Institute of Science and Technology in the capital.
“The deepening and broadening of democracy can be the next great achievement of this great country and its remarkable people,” she said. “Economic development and political openness should reinforce each other.”
Visa will teach financial literacy in rural communities and to bank and government employees, Buse said. The company also will work with airline RwandAir to develop online ticketing and reservations technology for the national carrier, she said.
“Make no mistake: This is absolutely a commercial activity from our perspective,” Buse said. “It is driving more volume and revenue across the Visa network.”
The company got 44 percent of revenue from outside the U.S. and processed 50.9 billion transactions valued at $5.87 trillion in the fiscal year ended Sept. 30, according to a statement.
Visa climbed 0.5 percent to $97.71 at noon in New York. It advanced 38 percent this year through last week, the third-best performance (S5INFT) in the Standard & Poor’s 500 Information Technology Index after Purchase, New York-based MasterCard Inc. (MA), the world’s second-biggest payments network, and video-game publisher Electronic Arts Inc.
Visa said last month it would roll out prepaid accounts on MTN Group Ltd.’s cellular network for 5.7 million customers across the Middle East and Africa, starting with Nigeria and Uganda. The offering is Visa’s first in the region since its $110 million purchase in June of Fundamo, a Cape Town-based provider of mobile-commerce technology in developing countries.
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