Mastercard, the world’s second-largest payment network, has teamed up with Mono, a Nigerian startup backed by Y Combinator, to facilitate direct bank payments without the need for cards or USSD codes. For Mono, this partnership represents a significant step forward in its journey toward profitability.

Abdul Hassan, the founder and CEO of Mono, stated to TechCabal that in 2023, the company transitioned from negative to positive gross profit and aims to achieve overall profitability by the end of the year. Their strategy involves scaling the adoption of their open finance tools, with plans for more partnerships similar to the one with Mastercard already in the works.

Mono, like its competitors, is broadening its focus from solely providing open banking APIs to lenders, to catering to a wider range of fintech companies in order to increase revenue streams.

Before collaborating with Mastercard, Mono had already partnered with Flutterwave, a major Nigerian payment provider, to enable merchants to receive payments through the DirectPay Pay with Bank option, which has already facilitated transactions exceeding ₦5 billion since its launch in 2022. With the new partnership with Mastercard, Mono expects to facilitate even higher transaction volumes, particularly given Mastercard’s extensive presence across several African countries, including Nigeria.

This partnership is advantageous for Mastercard as well, as it seeks to digitize spending through various channels beyond traditional card payments. Mastercard has been exploring non-card payment methods in Africa for years, including mobile money wallets, contactless payments, and QR payments. Hassan predicts that in three years, cards will primarily be used for offline payments, highlighting the potential for rapid adoption of account-to-account payment methods like those facilitated by Mono, especially in Nigeria.

According to Hassan, Mono has already connected over 3 million financial accounts across Nigeria, Ghana, and Kenya, indicating significant potential for growth in the region, particularly as QR payments and contactless payments gain traction at a slower pace in Nigeria.

The positive reception of account-to-account payments in Nigeria contrasts with the hesitancy observed in developed markets like the US and UK towards such options. Established card networks like Mastercard and Visa have faced reluctance from users in these regions due to the preference for the familiarity and convenience of card payments. Experts suggest that users may need additional incentives to embrace account-to-account (A2A) options fully.

However, in Nigeria, merchants are increasingly adopting the “pay with bank” option, which remains popular even when USSD and card payment alternatives are available, according to Hassan. This preference is likely due to the perceived ease and security of the method, as well as the instant settlement, which is faster than traditional card transactions.

Hassan believes that the success of account-to-account payments in Nigeria bodes well for Mono’s aspirations to become a household name. Currently offering a web-based app that allows users to track which fintech apps their bank details are linked to, the four-year-old startup aims to expand its reach to the broader consumer market. Eventually, Mono plans to launch a mobile app with additional features, capitalizing on its growing familiarity and user trust in the market.

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