MasterCard has partnered with Smile ID, an identity verification provider in Africa, to provide secure digital identity solutions across Africa. This deal will enable banks, fintechs, mobile money operators and players in this space to onboard new customers faster and reduce identity fraud.

Identity theft happens when criminals steal personal info to apply for new cards or accounts. MasterCard intends to combine its global insights and identity technology to enable customers to verify digital identity elements with Smile ID’s data verification and fraud detection capabilities.

According to a survey by TransUnion Africa, a credit reporting agency, banks in Kenya lose approximately KSh 13 billion each year to fraudsters. Identity theft in Kenya occurs through SIM Card swapping, phishing scams and data breaches where personal data is compromised due to vulnerabilities in legacy identity systems.

Card companies and financial institutions have resorted to implementing multi-factor authentication-verifying identities through multiple means to prevent unauthorised access. Others use biometric identification as well as conducting public awareness campaigns on how to protect personal information and the risks of identity theft.

As Africa’s digital economy is projected to reach $1.5 trillion by 2030, trusted identity solutions are a critical enabler of financial inclusion, fraud prevention, and cross-border commerce. Additionally, smartphone penetration is continuing to rise, necessitating an urgent need to unlock opportunities for millions through secure identity verification services that work across digital channels.

MasterCard, together with Smile ID, is helping to support compliance with Know Your Customer (KYC) requirements and Anti-Money Laundering (AML) regulations across Africa. As part of the agreement, MasterCard has also made a minority investment in Smile ID, reinforcing its long-term commitment to digital inclusion and innovation in Africa.

“This partnership with Smile ID is a pivotal step in advancing digital trust and inclusion across Africa. As fragmented identity systems slow down businesses and lock millions out of the digital economy, Smile ID’s innovative identity platform complements MasterCard’s commitment to fostering secure and inclusive digital ecosystems,” said Selin Bahadirli, Executive Vice President, Services, MasterCard EEMEA.

MasterCard customers, including Banks, Telecom providers, Mobile Money operators, and FinTechs can gain access to Smile ID’s advanced identity verification tools. These tools will be integrated into MasterCard’s digital platforms.  “The surge in synthetic identity fraud in Africa is costing banks and lenders hundreds of millions of dollars a year,” said Mark Straub, CEO of Smile ID.

“By joining forces with MasterCard we can help turn the tide. As we combine insights and technologies, we can expand opportunities for consumers by giving banks and mobile wallets the confidence to onboard the next 300 million African users securely, in seconds.”