Partnerships between payment processors in different continents drive the spread of e-commerce around the world.
Businesses that want to expand into Africa have one problem: the ability to receive online card payments using bank cards in places like Nigeria.
One example of this is Spotify. Many Nigerians have complained about not being able to pay for a subscription to the music streaming service since it launched in the country in March.
A mid-sized business based in, say Europe, will typically have one or two e-payment partners. One of those could be Worldpay, the payment processing platform acquired by Fidelity National Information Services (FIS) in 2019.
When this business has to expand to Nigeria, setting up payments for their customers becomes a hassle. It is relatively easier for big companies (like Spotify) to find a local partner that will plug them into Nigeria’s e-payments network. But what about the thousands of small businesses that don’t have such pull factors?
This is where cross-continental partnerships between payment companies, like the one Flutterwave has with FIS, plays a crucial role.
The partnership was first announced in January 2020 when FIS participated in Flutterwave’s $35m Series B round. Flutterwave also graduated from the FIS fintech accelerator program in 2016.
A major strategic goal of that raise was to position the Nigerian fintech startup as the partner of choice for companies, especially those offering financial services, looking to break into Africa.
“With this partnership, any Worldpay merchant in Europe or the U.S. can accept any African payment. If someone goes to pay Netflix with an African card, it just works,” Flutterwave CEO Olugbenga Agboola said at the time.
Flutterwave provides a single entry point into Africa for Worldpay users. What this means is that global businesses that use Worldpay’s services can now accept payments from their customers in Africa.
At the moment, Flutterwave’s integration with Worldpay will only be available in Nigeria and South Africa, two of the biggest economies on the continent. E-commerce through mobile phones is growing in both countries; by 2024, the sector is projected to be valued at $31 billion in Nigeria and $9 billion in South Africa, according to the 2021 Global Payments Report by FIS.
More African countries could be added to the network over time, depending on the development of e-commerce.
The big picture for Flutterwave is that FIS, a publicly traded multi-billion-dollar Fortune 500 company, has the muscle to expand Worldpay around the world. This week, FIS announced that it now has a license to make Worldpay available in Malaysia.
It increases the destinations where Flutterwave-enabled card payments from Africa can be accepted, furthering global conversations of a digitally connected world of commerce.
“With the growth of digital transactions opening up new markets and opportunities for global enterprises, merchants are looking for secure payment platforms in order to do business in these markets,” Agboola said.
“Our partnership with FIS supports our goal to connect global businesses to African markets, and local merchants to the world.”