Business

Net1 eyes the world once infamous social grants contract ends

2017-11-11 09:54

As Cash Paymaster Services’ infamous unlawful contract for paying South Africa’s social grants nears its end next year, its parent company Net1 Universal Electronic Payment System Technologies is betting large on the rest of the developing world.

The company announced a partnership with Carl Scheible, a former executive of PayPal and MoneyGram International, to target “already identified developing economies” with its South African payment system.

The aim is to deploy other large-scale payment systems like the one underpinning South Africa’s social grants.

Net1 simultaneously announced progress with an partnership between Indian mobile wallet company MobiKwik with Indian IDFC Bank to launch a “virtual card” payment system with Visa.

Net1 is a shareholder of MobiKwik.

This gives Net1 a hand in up to 65 million Indian consumers’ payments, it said.

In a quarterly financial update the company also reported how its “financial inclusion” revenues in South Africa have plummeted.

This is the airtime, microcredit and life insurance it sells – to a large extent to social grant beneficiaries.

Net1 revenues for these services fell 15% to $54.3 million (about R779.66 million) in the three months ending September 30 compared with the same three months last year.

At the same time, revenues from the “transaction processing” business in South Africa also rose 15% to $64.3 million.

While this category includes the social grants contract, the increase stems from Net1’s second payment network in South Africa, Easypay Everywhere.

Easypay is a low-cost bank account and card system that has recruited a large number of social grant beneficiaries.

At large count it had two million account holders, representing CPS’ local infrastructure after the social grant contract ends.

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November 12 2017