New mo­bile pay­ment kid Za­zoo aims high

Finweek English Edition - - INSIDE - BY GUGU LOURIE

Za­zoo, a new di­vi­sion of the J SE a nd Nas­daq- l is t e d co mpa n y Net1 UEPS Tech­nolo­gies Inc, is hop­ing that its pay­ment so­lu­tions for the mo­bile in­dus­try will en­able it to con­quer global mar­kets.

The f irm is eye­ing speedy global ex­pan­sion fo­cus­ing on the UK and other parts of Europe, US, In­dia and other de­vel­oped and emerg­ing mar­kets.

The com­pany has seen Za­zoo’s global foot­print ex­pand­ing into 12 African coun­tries, and it also has a pres­ence in Colom­bia, In­dia, Spain, South Korea, the Philip­pines, the UK and the US. Za­zoo plans to take Net1’s patented tech­nol­ogy, such as mo­bile vir­tual card (MVC) pay­ment app and soon-to-be launched Bio­met­ric Vari­able PIN, to new mar­kets, us­ing Lon­don as a con­ve­nient hub from which to co­or­di­nate all its global deals.

Philip Be­la­mant, the MD of Za­zoo, said that the move would un­lock the value of Za­zoo’s prod­ucts and so­lu­tions and “build a tech­nol­ogy com­pany for the fu­ture”.

Said Be­la­mant: “We in­tend cre­at­ing a new par­a­digm for se­cure pay­ments across mo­bile and in­ter­net chan­nels, and we plan to cap­ture a large por­tion of this mar­ket, which has re­mained rel­a­tively un­tapped due to the lack of di­rec­tion and fo­cus which ex­ists cur­rently.”

In­ter­na­tional ex­pan­sion, how­ever, is not an easy task, es­pe­cially in the fast-paced tech­nol­ogy mar­ket, which is dom­i­nated by big­ger play­ers.

“Noth­ing worth­while is ever easy. Be­ing in such a reg­u­lated in­dus­try, there are many ob­sta­cles that make it in­creas­ingly harder to break new ground. It will be chal­leng­ing, but we know we can over­come th­ese by com­pet­ing with our IP (in­tel­lec­tual prop­erty) and our in­no­va­tive so­lu­tions,” said Be­la­mant.

The com­pany has al­ready launched

its mo­bile pay­ment tech­nolo­gies, such as VC­pay, a vir­tual credit card app, in In­dia and SA. It will in­ten­sify its growth in both mar­kets and is plan­ning to glob­alise this in­no­va­tive prod­uct.

Za zo o be l i e v e s that its VC­pay card can­not be cloned or com­pro­mised. A card­holder gen­er­ates a MVC off­line and no one else can ac­cess it un­til the trans­ac­tion is com­plete. The off line ca­pa­bil­ity pre­vents card skim­mers from ac­cess­ing card de­tails through con­ven­tional back­end sys­tems.

With an MVC net­work, cov­er­age or sig­nal is not an is­sue as the process of cre­at­ing a card can be com­pleted off­line. As part of the safety of the app, the MVC card can be con­fig­ured to ex­pire im­me­di­ately af­ter the trans­ac­tion. This bank­ing suite op­er­ates on any type of mo­bile de­vice and al­lows for a mul­ti­tude of fund­ing op­tions and pay­ment ser­vices.

In SA, the pro­jected tar­get is around 500 000 users ini­tially and the num­ber could grow in other mar­kets. The growth pro­jec­tions may not be far-fetched, es­pe­cially us­ing In­dia as an ex­am­ple.

E-com­merce in In­dia is ex­pected to grow to over $30bn by next year from $13bn, ac­cord­ing to an e-Tail­ing In­dia study.

As in­ter­net users in In­dia reach num­bers of up to 400m in 2016 from 240m, driven i n l arge part by t he pro­lif­er­a­tion of low-cost smart phones, the need to make pay­ments on­line in a sim­ple and se­cure man­ner will also in­crease sub­stan­tially. Un­til now, the ma­jor­ity of on­line pay­ments in In­dia have been com­pleted us­ing credit cards, which are avail­able to less than 2% of the pop­u­la­tion, or by cash on de­liv­ery. For on­line pay­ments, vir­tual cards rather than plas­tic cards are more likely to be used in the fu­ture be­cause they are more se­cure. This is also a trend in other mar­kets such as Colom­bia, Brazil, Nige­ria and Kenya.

Za­zoo will also con­tinue tar­get­ing un­der-banked and banked cus­tomers who wish to use mo­bile as a pay­ment or se­cure in­stru­ment, bio­met­ric verification and cre­at­ing a se­cure at­mos­phere for card pay­ments.

With re­gard to ex­pan­sion into Brazil, Be­la­mant said that “it’s a pos­si­bil­ity”. “It’s a large coun­try with com­mon­al­i­ties with SA and In­dia. It’s all just a mat­ter of band­width for now but Brazil is cer­tainly on our radar.”

At least fo r no w, Za z o o ’ s in­de­pen­dence and size could turn out to be its strength – since it is able to play with the gi­ants in the mo­bile space with­out be­ing seen as a threat. It al­ready boasts clients and part­ners such as In­dia’s Axis Bank, Spain’s Bankin­ter, Econet Wire­less, Mi­crosoft, MTN, Or­ange and MasterCard, among oth­ers.

For now t he mo­bile pay­ments mar­ket is over­crowded with nu­mer­ous com­peti­tors, mak­ing it dif­fi­cult for any player to dif­fer­en­ti­ate them­selves.

But Be­la­mant ar­gues: “Few have our ex­per­tise and ex­pe­ri­ence in pay­ments, se­cu­rity, mo­bile devel­op­ment, smart cards, SIMs, s witch­ing, bank­ing reg­u­la­tions and the like. We are hop­ing that our ex­pe­ri­ence in the in­dus­try as well as our cur­rent global foot­print will con­tinue to give us the ad­van­tage.”

With its global foot­print span­ning al l t he con­ti­nents and i nno­va­tive tech­nolo­gies, Za­zoo stands a chance of ful­fill­ing its mission of be­ing a global player in the mo­bile pay­ments space in the next five years, but it’s not go­ing be smooth sail­ing.


Philip Be­la­mant

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