The acquisition follows the completion of a satisfactory due diligence of Eyenza by Altech and approval by the board of Altech.
Eyenza Mobile Money is a wallet based system whereby a deposit is made into a central pool account after the user has registered and a wallet is created and linked to the user’s MSISDN number. The user can then transact to the value of the deposit (funds in their wallet).
Commenting on the acquisition, Altech CEO Craig Venter had the following to say: “Altech has long identified the need to become involved in this rapidly growing area in the mobile payments market, but it has taken time to identify what we believe is a suitable point of entry. We believe that Eyenza incorporates all the necessary components that will allow Altech to successfully move into this progressive market.”
“Eyenza’s offering is unique as it can offer very competitive prices on its services due to its low cost structure and convenience factor. Currently, the unbanked population of South Africa has large monetary and inconvenience costs associated with transferring money to family members, paying of bills and purchasing pre-paid products. This service is set to change that.”
“Altech has a successful track record of developing new and innovative products and services for the ICT sector and now with their backing and support we will be able to take our mobile money services to the next level and become an important participant in this growing market,” he said.
The Eyenza service offering is bank and mobile network operator-agnostic in that it offers vending services with no requirement for pre-registered bank accounts and no restriction on existing banking partner or cellular provider and can be directly marketed to the unbanked.
“Eyenza incorporates a range of key success factors,” said Venter. “It is both bank and MNO (Mobile Network Operator) independent; it does not require a special cellular phone or SIM card; user registration is easily accomplished from the handset; and it can be operated via any of the four primary mobile communications channels (USSD, SMS, Java and data).”
Services currently offered include prepaid airtime, prepaid electricity, third party payment services (clothing accounts etc.) and making transfers to other account holders.
In time, Eyenza mobile money services will be expanded to include:
- Insurance cover – Funeral, life, household etc.
- Microloan distribution
- Lotto and sports betting
- Third party bill payments
- Retail payments
- Payroll distribution
- Government grants (Including pensions, child grants etc.)
- Agri-aid distribution and payment.
- Money transfer to third parties (i.e. non-Eyenza users)
- Loyalty programs
- Public transport – linked to embedded PayPass / PayWave contactless payment devices in handsets
- Pre-approved medical funding distribution
- On-line fast-food ordering
- Wireless-G data top-up
- Toll-Wallet top-up
Venter says there are significant market opportunities in mobile money services.
“Mobile money payment services are expected to reach US$245 billion in value worldwide by 2014. At the same time, mobile money users are expected to total 340 million, equivalent to 5% of all global mobile subscribers.”
Additionally, the acquisition is part of Altech’s strategic aim to capitalise on its existing businesses and grow market share through a range of value added services.
“Exploiting the synergies between our operations and moving customers up the value chain is all part of our growth drive and we see opportunities with other Altech operations, from the selling of prepaid airtime by Altech Autopage to Altech Card Solutions developing the Eyenza POS front-end applications for deployed terminal devices.”
According to Venter, Eyenza’s service offering is also perfectly suited to the unbanked environment in Africa and would provide a significant opportunity to leverage the presence Altech already has in East and West Africa. This will allow Altech to broaden its client base into Africa and will allow delivery of additional Altech product offerings abroad.
“The Eyenza model is easily replicable in other African and Asian environments and the major development costs have already been incurred,” he said.
To preserve current efficiencies and standards, Altech will retain existing Eyenza management and staff whilst it provides supporting administration services and strategic input to the company.
“The current CEO, Johan van der Westhuizen, and key employees have entered into five year service contracts in order to ensure a smooth transition into the Altech fold and I am positive that Eyenza will become a valuable addition to the Altech Group,” concluded Venter.