MasterCard Inc. has formed an alliance with a Somalian bank to issue debit cards in the last African market aside from nations under sanctions where it wasn’t present.
“These are the first domestically issued debt cards” in Somalia, Daniel Monehin, MasterCard’s division president for sub-Saharan Africa, said Tuesday in a phone interview before the World Economic Forum on Africa in Cape Town. MasterCard’s Somalian partner, Premier Bank Ltd., “is professionally run and we have been in negotiations with them for some time,” he said. The East African lender meets all of the standards set on anti-money laundering and “know your customer” rules, he said.
Somalia has been mired in decades of conflict since civil war in 1991, and the government continues to battle al-Qaeda-linked Al-Shabaab insurgents intent on establishing a strict form of Islamic law and a pirate scourge. The turmoil has restricted development of its banking system, and the country installed the first ATM machines in the capital, Mogadishu, only last year.
“Africa is one of the fastest growing regions for MasterCard and we see that continuing for the medium to long term,” Monehin said. “We’re beginning to have deep levels of engagement withgovernments, banks and telcos. Africa is ready for development and for moving to electronic payments because it’s safe, smart and can be used to collect government payments.”
Premier Bank is one of only four Somalian lenders that has a swift code. The system provides identification for lenders internationally and enables money transfers.
Somali Remittances
The banks’ ATMs will be able to accept MasterCards for cash withdrawals and the lender will issue 5,000 MasterCard debit cards this year, followed by prepaid cards, and point of sale machines.
Government agencies will be able to transfer salaries while the payments network will participate in the Somali remittances market, valued at more than $1 billion a year, according to MasterCard. The Purchase, New York-based company is in talks with other banks in Somalia to expand the network, Monehin said.
“Reassuring foreign investors, Somalis in the diaspora and those distributing aid that our financial systems are secure and properly regulated is critical to Somalia’s economic well-being,” Abdirahman Yusuf Ali Aynte, Somalia’s Minister of Planning and International Cooperation, said separately in a statement.
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