Allied Technologies (Altech) has acquired a majority stake in NuPay, for R53.5 million, as part of its strategy to increase annuity revenue, the company said this morning.
Altech said it would buy 50% plus one share in the payments processing company. NuPayment Solutions focuses on the automation of electronic debit orders, providing authenticated and non-authenticated managed transactions within the card-based and electronic funds transfer environments.
Altech is an investment holding company in the telecommunications, multimedia and IT industries. Its holding company is Allied Electronics.
CEO Craig Venter says the “acquisition perfectly fits Altech's strategy of growing its annuity revenue, which accounted for 79% of Altech's total revenue before this transaction”. Altech would also grow the critical mass of its IT division, complementing its existing operations, Venter notes.
NuPay processes more than 500 000 transactions a month. The deal would allow Altech to supply the switching services, point-of-sale devices and related software, as well as ongoing maintenance and support to NuPay, which has the largest number of installed point-of-sale terminals in SA, outside of the banking industry.
The payment company was formed a decade ago after the Usury Act was changed to prohibit micro lenders from retaining borrower's bank cards and PIN codes as security for payment, which opened up an opportunity for automation in the sector.
New targets
NuPay complements Altech Card Solutions' transaction switching division, as it provides expansion opportunities into new markets, increased transaction switching volumes and the possibility of exploiting diverse transactional and processing capabilities.
The payment company's call centre and field support will be expanded to include all of the merged products and services within Altech Card Solutions.
Venter says the deal has “various positive spin-offs for Altech and NuPay”. Due to NuPay's presence in the micro-finance payments industry, increased volumes of transactions will be processed through the combined switching capabilities.
The transactions will continue to be acquired by Absa, as Altech has signed a side deal with the big four bank. Venter says substantial synergies exist between NuPay and Altech's other business units, especially Altech Netstar and Altech Autopage Cellular, which manage their monthly subscriptions mostly through debit order.
Related stories:
Altech TC broadens bandwidth solution
Altron faces challenging year
Altech plays its aces
Share