JSE-listed Net1 UEPS Technologies and QR-code payments specialist Zapper said on Thursday that they will launch a new company, called ZappGroup Africa, to white-label and expand Zapper’s technology across the continent.
The companies have formed a new entity, called V2 Limited, to focus on facilitating financial inclusion to the estimated one billion underbanked population on the continent.
Net1 has acquired a 50% interest in V2 for US$5-million (about R73.5-million) and will commit an additional $5-million towards working capital funding over time.
V2, which will own 67% of ZappGroup Africa, will license Zapper’s QR payment technology as well as Net1’s various payment solutions such as its UEPS/EMV and mobile virtual card products. It has a perpetual and exclusive licence for Zapper’s proprietary QR technology across key African countries, including Nigeria, Ghana, Kenya and Tanzania, Net1 said in a statement to shareholders. Zapper will own the remaining 33% of ZappGroup.
“We intend to change the face of payments across Africa through innovative payment solutions,” said Net1 CEO Herman Kotze in the statement. “Traditional banks have struggled to service the unbanked population due to limited infrastructure and the high cost of providing last-mile connectivity. By leveraging Net1’s existing technologies, together with Zapper’s mobile solutions, we can address the needs of 70% of Africa’s population currently underserved by financial institutions.”
Kotze said Net1, which until recently was responsible for social grants payments in South Africa through its Cash Paymaster Services subsidiary, wants to emulate the impact QR payments have had in China over the past five years.
“QR payments currently dominate the payments landscape in China, with players such as WeChat and Alipay boasting of hundreds of millions of monthly active users,” Net1 said. “Mobile and QR solutions are leapfrogging traditional and card-based solutions in emerging countries across Asia.”
Cheaper
It said QR payments do not require costly point-of-sale equipment for merchants, and the key transaction infrastructure — mobile phones — is already pervasive in Africa. It quoted GSMA research, which predicts that smartphone penetration on the continent will reach 54% by 2020.
ZappGroup will target large markets in West and East Africa, from which regional hubs will be created for further deployments, it added. West Africa will be the initial focus, with launches planned in both Nigeria and Ghana.
“Nigeria has both the largest population in Africa and the greatest number of mobile subscribers, at 193 million and 161 million respectively. However, only 30% of the population has access to financial services.”
V2 has appointed Barry Lobel as CEO and Paul Edwards as chairman of the board. Net1 will be actively involved with the management of V2, and will have two representatives on the board, it said. — © 2018 NewsCentral Media