Mastercard, the second-largest payment network in the world, has partnered with Mono, a Nigerian YC-backed open banking startup, to enable payments directly into bank accounts without cards or USSD codes. For Mono, this partnership is another leap forward in its race to profitability.

“In 2023, we moved from negative to positive gross profit, and we want to be profitable by the end of the year,” Abdul Hassan, founder & CEO of Mono, told TechCabal. The startup expects to achieve profitability by scaling the adoption of its open finance tools. “We have more partnerships like this in the pipeline.”

The startup, like its competitors, has been expanding its focus from providing lenders with open banking APIs to servicing a wide range of fintechs to increase revenue. 

Before partnering with Mastercard, it had partnered with Flutterwave, one of Nigeria’s largest payment providers, to enable merchants to receive payment through the account-to-account option. According to Mono, Direct Pay, which powers this A2A  payment option, has handled payment transactions exceeding N5 billion since it launched in 2022. Mono can expect to facilitate even more volume as the Mastercard Payment Gateway System services numerous merchants across several African countries, including Kenya, Ghana, South Africa and Nigeria, where Mono currently operates.

On the other hand, this partnership is advantageous for Mastercard, as it has been finding new ways to digitalise spending. Through partnerships with payment providers, Mastercard has been exploring non-card payments in Africa for years: mobile money wallets, contactless payments, and QR payments. Around 2020,  over 1 million merchant locations across Africa were accepting  Mastercard QR payments.

”In three years, cards will mostly be used for offline payments,” said Hassan, who claims that Mono has connected more than 3 million financial accounts across Nigeria, Ghana and Kenya. He predicts that this account-to-account payment method will see even quicker adoption, especially in Nigeria, where  QR payments and contactless payments have slower uptake rates.

This optimistic outlook might be a breath of fresh air for established card networks like Mastercard and Visa, whose deployment of account-to-account payment in developed markets like the US and UK has met reluctance from users. Experts believe the consumer market in those regions favours the familiarity and ease of card payments for everyday spending and argue that users might require more incentives to adopt A2A options.

In contrast, in Nigeria, a lot of merchants are enabling the pay with bank option, which is repeatedly used even when there are USSD and card options, according to Hassan. “I think it is because of the ease and perceived security.”  Also, the settlement is instant and much faster than cards.

Hassan reasons that the success of this payment method for Mastercard spells good tidings for Mono’s dream to become a household name. 

“We currently have a web-based app that allows users to see how many fintech apps their bank details are linked to.” The four-year-old startup hopes to gain familiarity with the larger consumer market and eventually launch the web app as a mobile app with added features.

It looks like the company is playing a long game, but in a precarious market like Africa’s, it can be dangerous. However, Hassan himself has once said, “Most of the time you can win by just not dying.”