Net1 excited about venture targeting grants across globe
Net1 has appointed a leading international fintech veteran to help it drive the globalisation of the technology underpinning its controversial Cash Paymaster Services business.
This is the business responsible for distributing social grants in SA.
During the quarterly results presentation to analysts on Friday, CEO Herman Kotze said Net1 was "extremely excited" about the international initiative.
It will be led by Carl Scheible, whom Kotze described as an industry veteran who has worked for Moneygram and PayPal in Europe, Africa and a number of other markets.
In September 2015, Scheible was appointed chief commercial officer of ENett International, a payment solutions firm.
The new Net1 business would focus exclusively on large-scale financial inclusion opportunities in emerging markets across the globe.
"A significant effort will be placed on targeting social welfare programmes in those countries, using our proven biometric UEPS/EMV technology platform," Kotze told analysts.
There was a drive towards financial inclusion across the globe, he said, noting there were 2.5-billion people in the world who were unbanked.
The new international entity would be structured as a joint venture, with Net1 the majority shareholder and the balance held by management and funders. "We believe this structure is necessary to be able to attract and retain the best talent from leading companies and universities, and operate removed from noise in SA," said Kotze.
The new business, which is expected to be operational in early calendar 2018, has the backing of the International Finance Corporation, one of Net1’s major shareholders.
On Friday, International Finance Corporation executive Desmond Dodd confirmed to Business Day that this was the sort of initiative that had attracted the organisation, whose parent is the World Bank, to Net1.
Allan Gray’s chief investment officer, Andrew Lapping, said he had no comment to make on Net1’s new business initiative.
For the three months to end-September, Net1 reported revenue of $153m, which was down 2% in dollar terms and 8% in rand terms on the comparative quarter in financial 2017.
Strong performances from its South African businesses including EasyPay and ATMs, were more than offset by smaller prepaid airtime sales and regulatory changes in South Korea.
Earnings per shares of $0.43 were hit by inflationary cost increases, a higher tax rate and increased shares in issue.
Kotze said the results in recent quarters did not reflect the true potential "of what we are capable of delivering".