Vodacom’s lending book keeps growing rapidly, as the group works to position its recently launched superapp as the best e-commerce option for businesses to expand their online offering.
Airtime advance has become a big contributor to revenue from SA financial services for the Vodafone subsidiary. In the six months to September, the company advanced R6.3bn in airtime, putting it on track to surpass the R13bn lent in its most recent full year. The microloans translate to about half of total prepaid recharges.
SA’s largest mobile provider previously advanced only small amounts of airtime to customers with little to no credit balance, repayable when customers recharged accounts. But the offering was expanded in recent months to include cash advances of as much as R500 for up to a month.
In addition, Vodacom also offers loans to small businesses, with R4bn in supply chain financing lent for the half-year.
The loans are available on the group’s VodaPay superapp launched in late 2021. A superapp, which was first popularised by China’s WeChat, aims to be a one-stop shop for the user, with services ranging from connectivity, entertainment, shopping and finance. The platform has had more than 3.5-million downloads with 2.2-million of those by registered users.
Group CEO Shameel Joosub, on a mission to make a rising proportion of revenue from these new areas, is talking up his own book.
“Honestly, if I were a business, I’d be pushing to be on VodaPay, for a multitude of reasons,” he said. “First, it’s the most sophisticated platform in the world in terms of the AliPay technology.”
Financial services
According to Vodacom’s plan, new service revenue will contribute 25%-30% of group service revenue over the medium term.
In the period, financial services customers jumped more than a tenth to 63.1-million. These services include point-of-sales, legal cover, payment solutions and device cover.
The unit grew 19.2% compared with the matching time last year. In aggregate, these new services amounted to R7.9bn, contributing 18.9% of group service revenue. It issued 2.6-million insurance policies, a gain of 19.4%.
Rival MTN recently reported the number of customers of its fintech business was up 23.3% year on year to 63-million for the nine months to end-September. Fintech transaction volumes rose to 9.5-billion, up 32.7%.
Joosub emphasised the use of big data and customer value maximisation loyalty. CVM is a measure of a company’s perceived value for money delivered relative to its competitors, from a customer perspective.
“You can create a very big opportunity. And we’re seeing that with some of the vendors that are coming on. By putting dedicated teams behind them, working the system, they’ve seen the growth coming through in their businesses.”
The success of WeChat in China convinced companies, including Nedbank, which launched its superapp Avo in 2020, that new growth areas, such as mobile payments and integration with multiple service providers, is the future.
Lower fees
FNB has also taken a stab at the e-commerce space with a marketplace that allows businesses to list products and services, with the benefit of the bank’s payment integration.
Joosub said the group’s customer base of 45.5-million offers an attractive potential market for companies that sign on, with lower fees than other platforms such as UberEats and Mr D Food.
At launch, the mobile operator found support from companies such as Massmart, OneDayOnly, KFC, Clicks and Exclusive Books, which signed up to VodaPay.
These companies have developed mini-apps or programs with VodaPay tailored to their offering. During the period, the platform crossed 100 mini-apps. Short-term plans include allowing clients to send cash among themselves and scaling the microloans business.
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