A Nigerian company, Interswitch Transnational Holding, has acquired a majority stake in Paynet Kenya which owns the Pesa Point network of ATMs.
Interswitch provides electronic payment and transaction processing services to government, banks and corporate organisations.
Both companies declined to reveal the value of the transaction or the percentage of stake acquired, arguing that as private firms they are not obligated to make the information public.
“Interswitch will acquire a majority shareholding in Paynet Group while Paynet’s shareholders will become shareholders of the Interswitch Group,” said Mitchell Elegbe, Group Managing Director and Chief Executive Officer of Interswitch in Nairobi on Wednesday.
Paynet’s shareholders have been allocated some seats on the Interswitch Group Board under the agreement while Bernard Matthewman, current CEO of Paynet, will stay on as CEO in charge of the East African region.
The deal has widened Interswitch’s footprint in Kenya and provided it with 70 financial institutions and over 2,000 companies that Paynet was serving.
“This partnership will significantly expand our footprint in East Africa and uniquely positions Interswitch in the market,” he added.
The deal, which is subject to regulatory approvals, will see the Kenyan firm change its brand to that of the Nigerian headquartered company.
Interswitch said it is targeting the public cashless payment solutions that the Kenyan government intends to rollout as a possible source of revenue growth for the company.
Other than offering outsourced automated teller machine (ATM) services, Paynet also offers outsourced back office VISA processing, ATM-based wage payment, corporate payment, credit and debit processing.
Both firms already have operations in Uganda, which will now be merged.
“The payments market in East Africa is moving rapidly into an era where specific products are required for sectors like transport, health, government and county payments as well as the move towards secure Internet-based payments.
“Paynet has been looking for a partner that has both products and experience in these areas so we can rapidly deliver them in the most efficient manner.” Mr Matthewman said.
He added that Interswitch’s presence in Uganda provides additional strength for Paynet to grow in East Africa.
“The new business will provide comprehensive solutions for regional and international businesses looking to take advantage of growth opportunities in Africa,” he added.
In the recent past there has been increased appetite by Nigerian investors who are seeking to get foothold on to the East African market by using Kenya as their launching pad.
Recently, Guaranty Trust Bank (GTBank) Plc recently acquired a 70 per cent stake in Fina Bank Group entities in Kenya, Uganda and Tanzania Group at Sh8.6 billion.
Some Nigerians investors have also been reported to be eying the 70 per cent stake of Telkom Kenya currently owned by France Telecoms.
Interswitch said the deal will enable both to take advantage of fast-growing East-West Africa trade and continue to provide their customers, both businesses and government, with payment processing expertise. Source: Business Daily Africa