South Africa: Tech Start-Up Leads the Way for Mobile Payments in SA
A Cape Town tech start-up that successfully laid down the "tracks" for mobile payment apps like SnapScan to thrive has evolved into a dynamic business with aspirations to expand its value-added products.
WiGroup founder and CEO Bevan Ducasse said that creating a common mobile payment thread for consumers, retailers and banks was crucial, but that making the transaction fee "free" was game changing.
SA's only interoperable point-of-sale mobile transacting network was founded in 2007 and in 2015 has developed into a 90-strong team.
In August, Investec acquired a significant shareholding in wiGroup, with some reports valuing it at about R400m.
The core of wiGroup's focus has been putting down the interoperable payments layer, where retailers can connect to a single platform, while enabling mobile transaction apps that are launching.
"All the transaction apps can plug in to this platform and transact at any of the retailers," said Ducasse.
He told Fin24 that wiGroup has made transactions free for payments to ensure the ecosystem thrives.
"In order for the ecosystem to thrive, they really needed this open platform," he said. "Payments has become a commodity and so charging for a transaction fee on payments was becoming a barrier to the market."
The company makes profit by offering added-value services next to the payment system.
"You could, for example, link it to your Woolworths card or you could link it to the Vida e loyalty programme or you could auto redeem coupons at Checkers," he said. "Our ability through the platform to link these things is where we can generate revenue in added value services."
Ducasse said it's important for banks and retailers to understand that while they should have an exclusive platform for their brand, "there's a certain part that needs to be standardised in order to optimise the way they do it".
"If they can get that right, we really will thrive and I actually think we will show the rest of the world how it's done," he said.
"Because if you look at the other parts of the world, they're only starting to look at this interoperability, but you've still got pockets of innovation where they're building what we call island plays and it really limits the whole ability for the ecosystem to thrive."