i-Pay plans to expand after R10m cash injection
Local fintech firm i-Pay plans to expand following a R10 million investment from venture capital company Kalon Venture Partners.
The capital injection will afford Kalon a minority stake in the start-up.
According to i-Pay co-founder and CEO Thomas Pays, the company will use the funds to hire more staff and continue its plans to market its product and service offering in multiple countries across the globe.
"The investment will have a positive effect of accelerating our expansion into key markets in Africa and across the globe."
i-Pay is an instant smart EFT payment service that allows customers to make secure online payments directly into a bank account. The service is active with all six major banks in SA ? Absa, FNB, Nedbank, Standard Bank, Capitec and Investec ? and is available in SA and Nigeria. The firm plans to venture into other Sub-Saharan Africa countries.
The service was launched three years ago by Pays, Mitchan Adams and Lyle Eckstein, who say they identified a need for an efficient and secure online payment system in the local market.
"While online payments may be more common and understood in developed countries, South Africa is increasingly making inroads for a number of reasons," says Pays.
"Rising consumer awareness around the high costs, risks and effort required when using cash and credit cards to transact is resulting in a significant shift among South Africans towards more progressive digital payment options.
"We decided to develop the concept of automated bank-to-bank transfers and our goal was for this to happen within a few seconds, removing the administrative burden often faced by consumers when effecting an EFT manually. In addition, with cyber security being of utmost importance, the method of payment through i-Pay mitigates the risks which would normally be prevalent when initiating the traditional payment processes," explains Pays.
Clive Butkow, CEO of Kalon, says Kalon is following the international trend of investing in fintech companies.
"Globally, many traditional ways of doing banking are being challenged and i-Pay is a true innovator in this space ? in our view the company is at least 10 times better than any other EFT company we've seen. We are looking forward to seeing the firm's potential realised."
According to a Digital Market Outlook report from Statista, the transaction value in the mobile payments segment is expected to show an annual growth rate of 53.2%. In the EMEA region, the number of users is expected to amount to 11.3 million by 2021.
The deal is Kalon's third investment in four months. In August, the venture capital investment firm invested R7 million in mobile savings app SnapnSave.