Interswitch plans to introduce the business payment solution it introduced in Nigeria, Kenya, Uganda and two unnamed countries in West Africa.
The Quickteller Business Service will roll out in Kenya and Uganda in April or May after it started in Nigeria this week, Akeem Lawal, director of payments processing, told The Africa Report.
Interswitch, founded in Nigeria in 2002, has a physical presence in Kenya and Uganda, But the West African markets will be new to the company, he says in Lagos. Over time, the company would like to take advantage of its partnership Visa to become a pan-African payments platform, he adds.
Nigerian small and medium-sized enterprises (SMEs) contribute up to 48% of GDP, but many of them lack digital tools for transactions. Many small businesses in Nigeria suffered from failing to convert interest in social media into customers during the Covid-19 pandemic, Lawal says.
Quickteller Business offers retailers a website that they can share with customers and accept payments online or offline. The service also enables retailers to find new business customers, partners and suppliers.
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The solution may enable SMEs to “embark on the path to recovery” after Covid-19, says Lawal, a member of the company’s founding management team. Companies in Kenya and Uganda will get the same three months of free transactions which are offered in Nigeria, he adds.
Small businesses that sign up get access to Interswitch Portfolio of 5 million consumers.
- Lawal says work is in progress to create consumer profiles to match merchants with the most likely individual customers.
- Consumers and businesses can use Interswitch to pay taxes to 36 Nigerian states and the federal government.
- The company is working on adding tools that companies can use to manage their inventory and accounting.
- In December, Interswitch agreed a partnership with Credit bank in Kenya to create a prepaid multi-currency card that can be funded with mobile money.
- The company also has a Kenyan partnership with UnionPay International, Part of China’s UnionPay.
In 2019, Interswitch claimed “unicorn” status After a 20% purchase by Visa, the company valued the company at $ 1 billion. In September 2020, Interswitch is said to have held talks with potential investors before a planned IPO in London.
The company declined to comment on a possible IPO.
Analysts say Interswitch’s recent performance is encouraging.
When the company’s shares go public, they offer a game of African e-commerce that avoids the logistical problems associated with delivering goods that fellow unicorns suffer from Jumia.
Jumia’s shares are now trading at $ 62 in New York, compared to its 2019 IPO price of $ 14.50, despite not being profitable.
- In June, the rating agency Moody’s announced that Interswitch has a “solid profitability and liquidity profile” due to its good cash flow generation capacity.
- From 2017 to 2019, the company recorded average net sales growth of 17% with an average EBITDA margin (earnings before interest, taxes, depreciation and amortization) of 40%.
If e-commerce is Africa’s gold rush, then payment system providers are the shovel makers.