Nigerian company acquires controlling stake in Kenya’s PesaPoint

NAIROBI: Kenya’s electronic transactions platform is set for a dramatic change. This follows the acquisition of majority shares in Paynet Group, owners of PesaPoint, by Nigerian-based Interswitch Transnational Holding.

Under the acquisition deal, whose value is still undisclosed, Interswitch will acquire a majority shareholding in Paynet Group and Paynet’s owners will also be given shares in the Interswitch Group.

PesaPoint is found at 1,200 ATM locations, some of which are owned by Paynet and others by the more than 1,300 agent locations in Kenya.

The transaction creates an unrivalled payment infrastructure across East and West Africa, connecting over 100 financial institutions.

Bernard Mathewman, CEO of Paynet Group, will remain in charge of the East African business but sit on both boards of the new outfit.

“The motive behind this transaction is growth in both East and West Africa electronic payments industry. It is all about scale and an equity relationship such as this is the way to go. In time, Paynet will have to re-brand to Interswitch to create a TransAfrica brand that makes more sense to our customers,” explained Bernard Mathewman.

Interswitch is a Pan-African integrated payment and transaction processing firm, providing technology integration, advisory services and payments infrastructure to Governments, commercial banks and corporate firms.

It processes these transactions through ATMs, mobile, point of sale platforms, Online and IVR (interactive voice response), a telephony technology which enables someone to use a touch-tone telephone to interact with a database.

Founded in 2003, Paynet provides services to some 70 financial institutions and over 2000 companies-through Paynet, PesaPoint and Electronic Financial Technologies (EFT).

“At present, there are customers moving across the African continent, including between East and West Africa, through flights such as Kenya Airways. Provision of an electronic payments solution is therefore critical,” said Mitchell Elegbe, Interswitch Group Managing Director and Chief Executive.

Interswitch is eyeing opportunities in Kenya’s emerging cashless public transport system, domestic card business, nascent oil and gas sector and Government of Kenya’s plan to make cashless payments through e-procurement and other channels.

In the last 18 months, Kenya’s electronic payments platform has undergone significant changes including migration from magnetic strip to Chip and Pin plastic cards.

With the launch of biometric registration of all civil servants, plans by the Kenya Government to go cashless, is now on the launch pad.

“Our strength lies in the fact that we have a superior experience in credit card processing and agency network management. Interswitch completed the EMV migration in Nigeria some six years ago and has a range of products and services and commercial knowledge that is not available in East Africa,” said Mathewman.

It, however, remains to be seen how Kenyan customers will react to the acquisition of PesaPoint by Interswitch. Both companies have emphasised that the deal would enable both to take advantage of fast-growing East-West Africa trade.