Last week Investec Asset Management announced its acquisition of a significant shareholding in wiGroup, a South African company specialising in mobile transaction solutions. The aim of the investment is to assist the company’s expansion locally and internationally, with a key focus on Africa, the motherland of mobile payments.
WiGroup – founded in 2007 by entrepreneur Bevan Ducasse – has two core offerings. The first is wiCode, an integrated platform that allows merchants to accept payments from a multitude of different issuers, via their point-of-sale device. For example, in addition to receiving payments via cash and card, merchants will also be able to accept a number of mobile-based payment options (such as Vodacom’s M-Pesa or MTN’s Mobile Money) integrated into one solution.
In addition to this, wiGroup also offers merchants and FMCG brands a variety of mobile-based solutions including loyalty, rewards, coupons and gift programmes. It essentially allows for a card-free service. While many large retailers have card-based loyalty and rewards programmes, wiGroup’s technology allows for this to all be integrated into an app – from payments to loyalty points redemption, to coupons and vouchers.
But what makes the business attractive for Investec?
Likely to take off
According to William Alexander, private equity investment principal at Investec Asset Management, the business has gained traction over the past five years by selling its solutions to South African merchants, brands and issuers. Since its launch, wiGroup’s mobile transacting network has grown to over 55,000 point-of-sale lanes in South Africa. Its solutions are being used by five large retail chains (including Shoprite and Pick n Pay), over 10 hospitality groups, 50-plus FMCG brands and eight mobile money issuers.
To date, wiGroup has processed over R4bn (US$310m) in-store mobile transactions.
“We believe the company’s position is now entrenched and usage of its technology solution will increase,” Alexander told How we made it in Africa. “So we believe the company is at an inflection point and can grow its revenues very rapidly in South Africa from the current base.”
The integrated mobile solutions also allows customers to better monitor their rewards points status, as well as providing an analytical functionality for retailers. This can prove a very powerful tool to increase customer loyalty, noted Alexander.
For example, coffee shop chain Vida e caffé has used the technology to enable an app through which its customers can make payments. Customers can also easily monitor the number of loyalty points they have earned, and what has been redeemed. There is even a gifting option where customers can send a coffee voucher to a friend.
“And if Vida sees that you haven’t come in for quite a while, they can send you a voucher to say please come to Vida and [enjoy] a free coffee,” highlighted Alexander.
“So it gives retailers a lot of tools to drive footfall, customer loyalty and customer numbers into their stores.”
Potential in Africa and beyond
In addition to its Cape Town offices, the company has also opened up offices in the UK, Nigeria and Namibia.
Alexander noted wiGroup has considerable potential in other emerging markets, such as Latin America and the African continent, where mobile technology has the potential to leapfrog card-based payments.
In Nigeria, wiGroup has recently established a joint venture with transaction switching and payment processing company Interswitch.
Despite informal retail dominating in the vast majority of African markets, a number of wiGroup’s South African clients – such as Shoprite and Pick n Pay – have particularly strong expansion strategies for the rest of the continent. According to Alexander, the company’s solutions will likely follow their clients into various other markets.