JSE-listed Allied Technologies (Altech) has bought mobile wallet company Eyenza Mobile Money for an undisclosed amount.
Eyenza Mobile Money is a wallet-based system. Users register, create a wallet and then deposit money into a central pool, which is then linked to their Mobile Station Integrated Services Digital Network number. The user can then transact against the funds in their wallet.
The Eyenza service offering is bank and mobile network operator-agnostic, as it offers vending services with no requirement for pre-registered bank accounts and no restriction on existing banking partners or cellular providers, and can be directly marketed to the unbanked.
Altech CEO Craig Venter says: “Altech has long identified the need to become involved in this rapidly growing area in the mobile payments market, but it has taken time to identify what we believe is a suitable point of entry. We believe that Eyenza incorporates all the necessary components that will allow Altech to successfully move into this progressive market.”
The deal was approved by the board after a due diligence process.
Venter says Eyenza offers competitive prices on its services due to its low-cost structure. “Currently, the unbanked population of SA has large monetary and inconvenience costs associated with transferring money to family members, paying of bills and purchasing pre-paid products. This service is set to change that.”
Eyenza CEO Johan van der Westhuizen says the deal will aid the mobile company. With Altech's backing “we will be able to take our mobile money services to the next level and become an important participant in this growing market”.
Eyenza currently offers services that include prepaid airtime, prepaid electricity, third-party payment services such as clothing accounts, and transfers to other accountholders.
In time, Eyenza mobile money services will be expanded to include other services such as insurance cover, lotto and sports betting, payroll distribution and loyalty programmes, among others.
Growth opportunities
Venter says there are significant market opportunities in mobile money services. “Mobile money payment services are expected to reach $245 billion in value worldwide by 2014. At the same time, mobile money users are expected to total 340 million, equivalent to 5% of all global mobile subscribers.”
The acquisition is part of Altech's strategic aim to capitalise on its existing businesses and grow market share through a range of value-added services. “We see opportunities with other Altech operations, from the selling of prepaid airtime by Altech Autopage to Altech Card Solutions developing the Eyenza POS front-end applications for deployed terminal devices,” says Venter.
Eyenza provides an opportunity to leverage Altech's current presence in East and West Africa, allowing the company to broaden its client base and deliver more products. “The Eyenza model is easily replicable in other African and Asian environments and the major development costs have already been incurred,” says Venter.
Altech will retain existing Eyenza management and staff, providing supporting administration services and strategic input to the company. Van der Westhuizen and key employees have entered into five-year service contracts in order to ensure a smooth transition.
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