Take two for Belamont
Using technology to reach the masses
“That would be madness,” he says. It underlines the power of the country’s big four commercial banks, currently under investigation by the competition authorities over their control of the National Payments System and its effect on competition in the sector.
The new tie-up comes after Nedbank offloaded its 25% stake in Net1, previously Aplitec, which was listed on the JSE. Nedbank acquired the stake at the height of the global technology boom with an option to gain control of the firm – but it failed to capitalise on the relationship. When CEO Tom Boardman took over, he set about selling off non-core assets including the Aplitec stake.
ENTREPRENEUR Serge Belamont is having a second attempt at getting a local bank to use his smart-card technology to provide access to financial services to the poor. His company, Nasdaq-listed Net1 UEPS, has signed an agreement with Grindrod Bank, which will see it offer low-end products and services to the mass market.
While Net1 says it plans to use the new relationship to offer wage earners a smart card that will allow them to receive payment and transact cheaply and securely, Grindrod Bank MD David Polkinghorne stresses the bank isn’t going to be pitting itself against the big four.
Net1 plans to offer wage
earners a smart card that will allow them to receive payment and
Observers suggest the reason why Net1 and Grindrod Bank, which has no experience in retail banking, have teamed up, is because the group doesn’t have the legacy systems that would require integration into a new technology platform. Crucially, however, it does have a banking licence.
The deal gives Net1 access to that licence, but Polkinghorne stresses it’s not a joint venture – a business concept frowned on by the registrar of banks. Instead, he describes it as a technology agreement that will see Net1 paid a fee based on the amount of business the arrangement generates.
Grindrod Bank, a wholly owned subsidiary of listed shipping group Grindrod, was previously Marriott Bank. The shipping firm had owned a 50% stake in the investment bank and bought the remaining 50% last year when Old Mutual bought Marriott and saw no need to hold another banking licence.
While the unit must still define its product offering, it’s likely to be competing in the same space as mobile phone offerings Wizzit Bank and MTN Banking – two other initiatives seeking to use technology to provide access to financial services to people in remote areas.
Not wanting to rock the boat.