Net 1 UEPS Technologies and One MobiKwik Systems (MobiKwik) are signing into a subscription agreement in India.
MobiKwik, the largest independent mobile payments network in India, has a base of over 32 million users and 100,000 retailers.
The current shareholders of the group include Sequoia Capital, Tree Line Asia, American Express, Cisco Investments, GMO Payment Gateway and MediaTek alongside founders and executive officers, namely, Bipin Preet Singh and Upasana Taku.
Net1 will invest $40 million in MobiKwik as a part of the collaboration. Also, via the technology agreement, the Virtual Card technology offered by Net1 will be integrated across all MobiKwik wallets to offer ubiquity across all merchants in India.
“Our strategic investment in MobiKwik provides us with meaningful participation in one of the largest and fastest growing digital payment markets globally. Over the next three years, MobiKwik has targeted having 150 million users and 500,000 merchants, and the introduction of our various technologies is expected to enhance their value proposition and differentiation to users, online and offline merchants, increase acceptance, and accelerate growth,” said Serge Belamant, chairman and CEO, Net1.
With South Africa and India sharing similar traits like highly regulated markets, limited infrastructure and large unbanked populations, close ties and cooperation between the two countries have been present for long, which was boosted further by the visit from Indian Prime Minister Narendra Modi to South Africa, last month.
This transaction has offered support to their efforts by improving bilateral relations in trade and investment.
As per study reports from Google-BCG dated July 2016, the size of the digital payments industry in India will reach $500 billion by 2020, resulting in a ten-fold increase from the current levels.
The report also estimated that 50 percent of the internet users in India will work on digital payments by 2020, with the top 100 million users among them driving 70 percent of net digital payments by value.
The value of remittances and money transfers that will pass through alternative digital payment instruments will double to 30 percent by 2020, adds the report.
“With Net1’s expertise and track record in facilitating financial inclusion across Africa, our strategic relationship with MobiKwik marks an important milestone from which we can leverage India’s substantial efforts to drive financial inclusion, down to the grassroots in rural and deep rural areas. Many of our solutions, most notably UEPS/EMV, are tailor-made to provide multiple financial and other services, increase accessibility, eliminate fraud and reduce cash,” concluded Belamant.
Mobikwik had announced in May, this year, that it is trying to raise $50 million in its Series C round raising an undisclosed amount from the Japanese payment gateway GMO and Taiwanese semi-conductor company MediaTek. Also, the company had earlier raised a sum of about $30 million.
In the meanwhile, Net 1 recently announced that its revenue for the year was down 6 percent to $590 million, even though it was more QoQ, with gains of about 19 percent. Net1 offers debit, credit and prepaid processing and issues services for Visa, MasterCard and ChinaUnionPay in China and other territories across Asia-Pacific, Europe and Africa, and the US through Transact24.