Interswitch Limited, a leading technology-driven company focused on the digitisation of payments in Nigeria and other countries in Africa, and Visa Inc., the world leader in digital payments have announced a strategic partnership that will further advance the digital payments ecosystem across Africa.

As part of the agreement, Visa will acquire a significant minority equity stake in Interswitch.

The investment makes Interswitch one of the most valuable African FinTech businesses with a valuation of US$1 billion. Visa will join globally renowned investors, Helios Investment Partners,TA Associates and IFC, as shareholders in Interswitch, alongside Company management.

Founded in 2002, Interswitch disrupted the traditional cash-based payments value chain in Nigeria by introducing electronic payments processing and switching services. Today, Interswitch is a leading player in Nigeria’s developing financial ecosystem with omni-channel capabilities across the payments value chain, processing over 500 million transactions per month in May 2019.

In 2018, electronic payments in Africa accounted for only 12 per cent of transactions by volume, compared to 54 per cent in Europe and 79 per cent in North America. Sub-Saharan Africa is the fastest-growing digital payments market in the world, with electronic payment volume expected to grow at a CAGR of approximately 35 per cent from 2018 to 2023in the region (excluding South Africa).

This progress is expected to be driven by the deepening payments infrastructure, population and urbanisation growth, GDP growth above the global average, increased mobile and internet penetration, as well as a supportive regulatory landscape for electronic payments and financial inclusion.

Interswitch’s core market, Nigeria, is the largest economy in Africa with a rapidly growing electronic payments market. Point of sale (“POS”) and ATM transactions per adult grew at a CAGR of 94 per cent and 59 per cent from 2013 to 2018, respectively.

In Nigeria, there were only 11 card transactions per adult per annum in 2018 compared to 92 in markets like South Africa,126 in Brazil and 465 in the UK. Despite this market under-penetration, POS card transactions in Nigeria are expected to grow at a CAGR of 63 per cent between 2018 and 2023.

In addition to its switching and processing services, Interswitch owns Verve, the largest domestic debit card scheme in Africa with more than 19 million cards activated on its network as of May 2019.

The business also operates Quickteller, a leading multichannel consumer payments platform, driving financial inclusion across Nigeria with over 270,000 access points, as of 2018, from which consumers can initiate peer-to-peer transfers, bill payments, airtime purchases, and other e-commerce transactions, processing over 42 million transactions monthly as of 31 July 2019 (equivalent to over NGN560 billion (US$1.5 billion) through direct, indirect and Paypoint channels).

Interswitch’s unique market capabilities and strong consumer proposition, has enabled it to deliver consecutive years of sustainable profitable growth.

The partnership will create an instant acceptance network across Africa to benefit consumers and merchants and facilitate greater connectivity for communities. Both parties will also retain their respective independent solutions, and Interswitch will retain its scheme neutral strategy.

Mitchell Elegbe, Founder and Chief Executive of Interswitch, said; “Sub-Saharan Africa is the fastest growing payments market in the world, with growth driven by a young and dynamic population, rapidly evolving consumer behaviour, and an increasing desire for payment solutions that can be accepted across the continent and abroad. I am delighted that Interswitch has formed a partnership with Visa, with whom we plan to drive the next phase of transformation in the African payments landscape.”

Andrew Torre, Regional President CEMEA, Visa, said; “Africa is a priority region for us, and we continually seek strategic partnerships with local players to further strengthenour leadership position and enhance the payments ecosystem across the continent. This partnership aligns with our global strategy to work with and invest in innovative partners, and we look forward to working with Interswitch to provide new consumer and merchant experiences and support the rapid growth of digital commerce across Africa.”

BabatundeSoyoye, Helios’s co-founder and Managing Partner, added, “A strategic investment by Visa, the world’s leader in digital payments, into Interswitch is a substantial endorsement of the Company’s expertise in African payments. As an active investor in leading African payments businesses, we see tremendous opportunities to digitise payments across the continent and have worked closely with Interswitch’s management team to build a high quality and scalable platform geared to address some of these opportunities. We look forward to further collaboration with the Company alongside Visa.”

The transaction is subject to the relevant regulatory approvals and is expected to close by Q1 2020.

FT Partners acted as exclusive strategic and financial advisor to Interswitch on this transaction.

By Elvis Eromosele

These terms: cyberspace, cybercrime, cyberattacks and cybersecurity are increasingly gaining grounds in today’s society. They are readily on the lipsof individuals, ranging from small businesses and corporations to governments. The entry of these terms into the common lexicon shows the pervasiveness of internet today.

While cyberspace, according to Wikipedia, refers to the virtual computer world, it is today a conventional means to describe anything and indeed everything associated with the Internet and the diverse internet culture.

It has become evident that the growing access to mobile internet services and the widespread, interconnected digital technology brings cyberspace within the reach of millions of Nigerians and businesses. Today, the cyberspace is the go-to-space for work, play and relaxation.

However, sadly, because people with evil intentions would always seek to take advantage of this space as it contains data of any kind, systems security has become the most important element for all the players in the cyberspace. These so-called evil people launch attacks and commit crimeson the internet, this is done in cyberspace is called cyberattacks or cybercrime.This means more and more individuals and businesses are susceptible to cyberattack.

To curb this act, the emergence of the digital economy has led to a growing urgency to protect players in cyberspace.The urgent need therefore is to protect players in cyberspace and ensure integrity of information which is the basis of the digital economy.

Today, while it is clear that almost everyone has an idea about cyber security, it is still doubtful if anyone is really doing enough to guarantee it.The truth still remains that the threat of cyberattacks is real and this growing threat is with the potential to stall progress or cause the collapse of the digital economy.

This is certainly a multi-faceted challenge. Individuals, businesses and the government have to be prepared against its onslaught.The question however is: What sort of damage can result from cyberattacks and cybercrime in general?Hard to tell until its experienced.

Consider the result of a recent survey conducted by International Monetary Fund(IMF). It indicates that “cyberattacks are bringing in $100 billion in losses to financial institutions (FIs).” This is due to the fact that FI’s play a vital role in procuring and handling funds.

According to the IMF Staff Modeling Exercise report, “hackers choose FI’s as easy targets due to the fact that they can spread the attack quickly through the interconnected financial system”.

The reference here is to Denial-of-service (DOS) attacks, Man-in-the-middle (MITM) attacks, password attacks and so on.

In Nigeria, where nearly everything is hush-hush no one can really tell how many companies have faced denial of service threat? How many have paid various ransom to access their own files?  These figures may not be in the open but they are real nonetheless.

Also take a look at the huge sums associated with cyber fraudsters nabbed by the EFCC recently-mind boggling figures that were almost unimaginable a few short years ago.

To bring it closer, another prevalent form of attack; one that nearly everyone must have heard of, is someone locking a member out of a WhatsApp group and then using his number to scam other members. For this, the fastest way to combat this threat is to quickly set up two step authentication code NOW.

One cheery news here is that the National Information and Technology Development Agency (NITDA), the official government body saddled with the responsibility to develop and regulate information technology in Nigeria, is demonstrating that it is aware of the issues.

The Director-General of the agency, Kasheem Inuwa, noted at a recent forum that “the increasing use of digital technologies is continually exposing sensitive information and critical systems to risks and threats in cyberspace.”

In combating the problem, he revealed that the agency is implementing new regulations, inspecting and examining regulated entities, providing support to its constituents and collaborating with relevant stakeholders and sensitizing citizens.

It must now consider establishing a department dedicated to coordinating cyber security regulations and policies in the country in line with global best practice. NITDA cannot afford to be reactive at this time but proactive to help Nigeria stay ahead of the risk.

Themenace is real. The danger is close to all. The loss affects many.

Governments and its agencies have the responsibility for policies and regulations to limit incidences of cyberattacks and cybercrime. They should educate the populace about the cyber security. Cue NITDA. In addition to the government’s efforts, to curtail the menace and eliminate the danger, everyone must be involved. All hands must be on deck because the responsibility belongs to each one of us. The national assembly should look closely at reforming relevant laws and where necessary explore new laws to effectively manage cyberspace. As a guide, it may want to check out what other countries are doing.

To add to this, organizations that offer and provide services over the internet must install robust cybersecurity solutions. They must spare no expense to ensure the security of transactions on their platforms. Financial and cloud services providers must be particularly involved here.

Cybersecurity is not the place to penny pinch or cut expense to improve profit. Firms must realize that installing multilayer security is systems is no more a luxury but a must have.Corporations offering cloud services have a particular role to play. They must invest massively in security infrastructure.

For the individual, he/she must also watch out for his personal security. Follow basic rules for online security. Principally, people must learn to keep personal information professional and limited, ensure privacy settings stay on and that internet connection is secure.

In addition, individuals must learn to choose strong passwords, be careful what and where they download and be wary of sharing private information over free and public Wi-Fi.

Countless conversations have been held concerning cybersecurity, it is time for actions totake place and there is absolutely no better time than now to start. Like never before, information integrity, confidentiality and security must today be sacrosanct.

It is only through eternal vigilance and proactive measuresthat we can curb incidences of cyberattacks and cybercrime.

Elvis Eromosele, a Corporate Communication professional and public affairs analyst lives in Lagos.