Pan-African cross-border payments services provider MFS Africa has acquired Beyonic, a digital payments management provider of business services for SMEs, Fintechs, and social impact entities across Africa. While the companies believe the deal will add value to Africa’s digital payment ecosystem, they have commented on recent developments in Zimbabwe and have expressed concern.

According to a statement released to the media, as a digital payments hub MFS Africa connects over 200 million mobile wallets on the continent via one API, and Beyonic focusses on domestic payments and collections coupled with secure front-end business functionality.

The companies say the deal is subject to regulatory approval by the Fair Competition Commission in Tanzania, and will provide the growing micro, small, and medium enterprise segment across Africa with the ability to manage digital transactions with individuals and businesses around the world.

Dare Okoudjou, founder and CEO of MFS Africa, said: “Africa has a strong base of connected young entrepreneurs and business people who are bringing fresh ideas to the table, in order to create prosperity for themselves and for their communities on the continent. With the MFS Africa Hub, we have been creating new digital pathways between mobile money users in Africa and the global economy. With the acquisition of Beyonic, we can now put this digital payment network at the service of those entrepreneurs whether they are SMEs, Fintechs, or social impact organisations. By combining MFS Africa’s and Beyonic’s assets and capabilities, we can unleash the wealth of opportunity that business within Africa and with Africa presents to the wider world.”

The companies explain that extended access and functionality will become available to customers of both organisations in the second half of 2020.

They state: “In practice, this means that a Uganda-based organisation that uses Beyonic to manage digital payments to and from Ugandan mobile wallets and bank accounts will be able to reach additional markets directly and seamlessly using the same interface, leveraging the pan-African and global connections of the MFS Africa Hub.”

Luke Kyohere, founder, Executive Chairman, and CTO of Beyonic, said, “MFS Africa’s mission to make borders matter less in digital payments aligns perfectly with Beyonic’s vision of helping enterprises deliver fast, affordable Fintech solutions to the last mile, where they are needed the most. Together, we will give our customers access to the broadest and deepest digital payment network in Africa.” I’m excited about the possibilities this partnership brings, especially when you factor in MFS Africa’s recent partnership with Visa, enabling them to issue Visa payment credentials across their pan-African network. It’s a new dawn for SMEs in Africa.”

According to the World Bank, SMEs contribute up to 40% of national income (GDP) in emerging economies. However, they face a number of growth constraints in emerging markets, including the ability to scale operations domestically, continentally, and internationally.

LUN Partners Group served as financial and strategic advisor and Dahui Lawyers served as legal counsel to MFS Africa and its Board of Directors in this transaction. ENS Africa also provided local law counsel and due diligence to MFS Africa on the transaction. Beyonic was advised by financial advisor ICON Corporate Finance and legal counsel Nutter McClennen & Fish LLP.

Monica Shupikai Simmons, Director of Tech Investment Bank, ICON Corporate Finance, who led the transaction said, “We are delighted to have advised Beyonic on its sale to MFS Africa. This deal is one of the most significant cross-border African FinTech M&A transactions in recent years. Global financial connectivity to Africa’s micro and SME sector has never been more important. The combined company will provide a seamless financial platform which opens unparalleled digital commerce opportunities across Africa and beyond.”

Zimbabwe crisis

Recent news out of Zimbabwe regarding mobile money regulation is troubling, companies add.

“The recent news out of Zimbabwe is certainly troubling, and goes against a positive trend we've seen in other African nations. Since the beginning of the COVID-19 crisis, regulators and leaders from Kenya to Togo have taken measures to promote the use of mobile money, not only for its economic benefit but to avoid the contagion risks posed by cash payments. The decision to ban mobile money in Zimbabwe hurts everyday people and significantly hinders economic growth in the country and the region. MFS Africa has been in partnership with EcoCash for many years, and hopes that the regulators will adopt a more pro-mobile, pro-poor approach,” they state.

MFS Africa and Beyonic believe that mobile money regulation in Zimbabwe will certainly impact mobile money use and uptake in the country, and add that the financial enabling environment of any one country has knock-on effects on the wider regional ecosystem, as it can bolster or stifle trade.