MultiChoice is joining mobile operators such as Vodacom and MTN in turning to financial services and digital payments as a way to grow revenue outside its traditional business.
On Tuesday, the DStv operator unveiled Moment, a new division which will process and aggregate payments across the African continent. Africa’s largest pay-TV operator describes the unit as “a new payments company helping businesses and individuals enrich their lives by connecting Africa to the world”.
In telecom, Vodacom and MTN have turned to financial services — specifically mobile payments — as a source of new revenue. With about 108-million customers between them, the business has proven lucrative and has added offerings such as lending and insurance.
MultiChoice is hoping payments will be just as profitable for its business, which is centred on entertainment. The group has chosen to differentiate itself by creating a platform where a number of payments providers integrate their various solutions in one place — across cash, mobile payments, cards, bank transfers and digital wallets.
The group has had its own internal payments platform for a number of years, given its operations across Africa, where rates of access to formal banking services are about 35% to 40%, far below SA’s estimated 80%. As such, the company has had to be creative in how it accepts payments from its more than 23-million customers. The group is looking to open up that system and commercialise it.
“If you look at MultiChoice, spanning across 50 markets on the continent, we already process about $3.5bn (R67.53bn) of payments just as a business alone,” group CEO Calvo Mawela said on Tuesday as MultiChoice conducted its first capital markets day.
“Out of the $3.5bn, we have integrated over 200 payment companies that allow payments to come through and makes it easy for people to make payment. Out of that we leave about $60m on the table in commissions that we pay to these third-party payment companies that integrate into our [systems].”
He says management has taken lessons from Irdeto, the group’s digital security company acquired by former parent Naspers in 1997.
“We brought them in-house and turned a cost centre into a profit centre in Irdeto and that has created shareholder value. In this initiative, with the best in class in terms of Moment partners Rapyd and General Catalysts we are trying to do the same thing.”
MultiChoice’s new platform is a joint venture with Rapyd, a payments platform that inserts fintech services into any app and simplifies the complex offering of local payment methods. The project includes venture capital partners General Catalysts, Raba and Entree Capital.
According to the group’s vision, customers will be able to pay for DStv or Showmax subscriptions while at the same being able to settle bills, buy goods and services online, pay for transport and education, buy goods in store, and fund their betting and gaming.
Given its footprint across the continent, the group is looking to do cross-border payments and remittances.
The partner-heavy platform — in pilot across a number of MultiChoice’s markets — has buy-in from MTN, BankservAfrica’s PayShap, transactions cleared on an immediate basis platforms, and the Nigeria interbank settlement system.
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