To view the PDF file, sign up for a MySharenet subscription.

NET 1 UEPS TECHNOLOGIES INC - Net1 Partners with Zapper to Deploy QR Payment Technology Across Africa

Release Date: 04/10/2018 15:00
Code(s): NT1     PDF:  
Wrap Text
Net1 Partners with Zapper to Deploy QR Payment Technology Across Africa

Net 1 UEPS Technologies, Inc.
Registered in the state of Florida, USA
(IRS Employer Identification No. 98-0171860)
Nasdaq share code: UEPS
JSE share code: NT1
ISIN: US64107N2062
(“Net1” or “the Company”)

Net1 Partners with Zapper to Deploy QR Payment Technology Across Africa

Johannesburg, October 4, 2018 – Net1 (NasdaqGS: UEPS; JSE: NT1) today announced that it has
entered into a strategic relationship with Zapper, the leading South African QR payments technology
company with more than a million customers. Zapper’s QR technology and payment platform is one
of the most advanced and complete QR payment offerings, and it has operations currently in South
Africa, the United Kingdom and the United States. Net1 and Zapper will partner to launch ZappGroup
Africa (“ZappGroup”), a company focussed on deploying a universal white-label QR payment
solution.

Deal Structure

A newly formed entity called V2 Limited (“V2”), will be an Africa-focused technology provider,
focused on facilitating financial inclusion to the roughly one billion underbanked population on the
continent. Net1 has acquired a 50% interest in V2 for USD 5 million, and will commit an additional
USD 5 million towards working capital funding over a period of time. V2 will have access to license
Zapper’s QR payment technology as well as Net1’s various payment solutions such as UEPS/EMV
and mobile virtual card. V2 Limited owns 67% of ZappGroup Africa, which has a perpetual
exclusive license for Zapper’s proprietary QR technology across key African countries, including
Nigeria, Ghana, Kenya and Tanzania. Zapper will own the remaining 33% of ZappGroup.

“We intend to change the face of payments across Africa through innovative payment solutions,” said
Herman Kotze, CEO of Net1. “Traditional banks have struggled to service the unbanked population
due to limited infrastructure and the high cost of providing last mile connectivity. By leveraging
Net1’s existing technologies together with Zapper’s mobile solutions, we can address the needs of
70% of Africa’s population currently underserved by financial institutions. QR payments have
transformed China’s payments landscape over the past five years, and we believe our joint efforts will
have a similar effect across Africa,” he concluded.

Strategic Rationale

QR payments currently dominate the payments landscape in China with players such as WeChat and
Alipay boasting of hundreds of millions of monthly active users. Mobile and QR solutions in
particular are also leapfrogging traditional and card-based solutions in emerging countries across
Asia.

The vast majority of Africa’s 1.3 billion people are unbanked, and this market remains one of the
largest untapped opportunities for fintech players like Net1, who have extensive expertise on the
continent. QR payments do not require costly point of sale equipment for merchants, and the key
transaction infrastructure, mobile phones, is already pervasive with over a billion mobile connections.
Additionally, according to a 2017 study by the GSM Association, smartphone penetration is forecast
to increase from 33% currently to 54% by 2020.
QR payments and, in particular the Zapper QR payment platform, cater to the needs of the users and
address the issues of limited infrastructure and interoperability across various mobile money and other
payment methods. Zapper’s solution is open, universal and is also one of the first platforms to be
cross-compatible with Alipay.

Rollout Strategy

ZappGroup will target key regions across West and East Africa, from which regional hubs will be
created for further rollouts. West Africa will be the initial focus, with launches targeted in both
Nigeria and Ghana.

Nigeria has both the largest population in Africa and the greatest number of mobile subscribers, at 193
million and 161 million respectively. However, only 30% of the population have access to financial
services. The Central Bank of Nigeria, under their Payments Vision for 2020, intends to add 40
million previously excluded individuals to the financial sector in the next two years.

Nigeria’s growth is representative of the trends in the region more broadly, with Ghana’s mobile
money transactions almost doubling in 2017 to USD 35 billion, nearly rivalling the scale of market
leader Kenya, which has approximately USD 45 billion in mobile money transactions, despite
Ghana’s population being less than 60% of Kenya’s.

ZappGroup has signed letters of intent and expressions of interest with some of the largest operators
and key industry players across the region, and is targeting its first country launch in fiscal Q2 2019,
followed by a second country launch in the second half of fiscal 2019.

Management team

V2 will be led by Barry Lobel as chief executive officer, and Paul Edwards as chairman of the board.
Net1 will be actively involved with the management of V2, and will also have two representatives on
the board.

Mr. Lobel has over 15 years’ experience restructuring and building small-to-medium sized businesses
with specific focus in Africa. Most recently, he was responsible for the restructuring of various
payment and e-money platforms across Europe, Africa and South America. His former roles include
Executive Director and CFO of Atlas African Industries, Director of Finance at Partners Capital, and
Co-Head of Private Equity at RP Capital.

About Net1 (www.net1.com)

Net1 is a leading provider of transaction processing services, financial inclusion products and services
and secure payment technology. Net1 operates market-leading payment processors in South Africa
and the Republic of Korea. Net1 offers debit, credit and prepaid processing and issuing services for all
major payment networks. In South Africa, Net1 provides innovative low-cost financial inclusion
products, including banking, lending and insurance, and is a leading distributor of mobile subscriber
starter packs for Cell C, a South African mobile network operator. Net1 leverages its strategic equity
investments in Finbond and Bank Frick (both regulated banks), and Cell C to introduce products to
new customers and geographies. Net1 has a primary listing on NASDAQ (NasdaqGS: UEPS) and a
secondary listing on the Johannesburg Stock Exchange (JSE: NT1). Visit www.net1.com for
additional information about Net1.

Forward-Looking Statements

This press release contains forward-looking statements that involve substantial risks and uncertainties.
All statements, other than statements of historical fact, included in this press release regarding
strategy, future operations, future financial position, future revenues, projected costs, prospects, plans
and objectives of management are forward-looking statements. The Company may not actually
achieve the plans, intentions or expectations disclosed in its forward-looking statements. Actual
results or events could differ materially from the plans, intentions and expectations disclosed in the
forward-looking statements that the Company makes. Factors that might cause such differences
include, but are not limited to: failure by the Company to realize the anticipated benefits from the
Zapper transactions; other factors, many of which are beyond the Company’s control; and other
important factors included in the Company’s reports filed with the Securities and Exchange
Commission, particularly in the “Risk Factors” section of the Company’s Annual Report on Form 10-
K for the fiscal year ended June 30, 2018, as such Risk Factors may be updated from time to time in
subsequent reports. The Company does not assume any obligation to update any forward-looking
statements, whether as a result of new information, future events or otherwise.

Investor Relations Contact:
Dhruv Chopra
Head of Investor Relations
Phone: +1-917-767-6722
Email: dchopra@net1.com

Media Relations Contact:
Bridget von Holdt
Business Director – BCW
Phone: +27-82-610-0650
Email: bridget.vonholdt@bm-africa.com

Johannesburg
October 4, 2018

Sponsor:
Rand Merchant Bank, a division of FirstRand Bank Limited

Date: 04/10/2018 03:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Share This Story