In a reminder of the changing business models of many operators in Africa, it has been reported that the M-Pesa virtual Visa card, introduced in June, is now undercutting Kenya’s commercial banks in the foreign exchange market.

The virtual card, available to all M-Pesa users in Kenya – there are more than 30 million – is charging a lower forex rate than banks for payments across Visa’s 61 million merchants.

Kenya’s Business Daily suggests that the lower forex rate aims to win M-Pesa a larger share of the country’s cross-border payments market.

As we reported at the time, the M-Pesa Global Pay Visa Virtual card will allow users to securely pay 100 million foreign merchants from their mobile phones without credit cards or accounts with payment processors. The virtual card also targets subscription markets for services like Netflix and Spotify. It is to be expanded beyond Kenya, to Tanzania, Mozambique, Congo, Lesotho and Ghana, over the next year.

At just over 38%, M-Pesa has already overtaken voice (about 31%) to become the biggest revenue earner for operator Safaricom, boosted by a cashless trend encouraged by the Covid-19 pandemic and by continuing service diversification.

For example Lipa na M-Pesa, a cashless payment service that allows customers to make payments for goods and services securely and conveniently, has aggressively recruited merchants across the country, including businesses such as fuel stations, supermarkets, corner shops and eateries that card payment services may have avoided, preferring to target formal retailers.

And more growth is planned as Safaricom aims to roll out new M-Pesa services in areas such as investments and insurance – if the Kenyan regulator approves.