DPO Group - Afrikan Heroes

Nigerian Hospitality Industry Urged to Increase Payment Options to Maximise Growth

December 15, 2022

Chidinma Aroyewun, DPO Group's country manager in Nigeria

The Nigerian hospitality industry has been urged to increase payment options to maximise growth. This is as a response to the just released World Travel & Tourism Council’s Economic Impact Report (EIR) which shows that Nigeria’s travel and tourism sector’s contribution to GDP is forecasted to grow at an average rate of 5.4% between 2022-2032.

After many months of low or no growth, the Nigerian hospitality industry is gearing up to take advantage of good future opportunities. However, customers now prefer to browse, research, and transact online and hotels must ensure they can offer their foreign customers as many digital payment methods as possible. Fortunately, there is a safe way to collect payments from international and virtual cards that can also help companies take advantage of the new business that is expected in the coming months.

The World Travel & Tourism Council’s Economic Impact Report (EIR) (https://bit.ly/3YlfroU) shows that Nigeria’s travel and tourism sector’s contribution to GDP is forecasted to grow at an average rate of 5.4% between 2022-2032, a good deal higher than the 3% growth rate of the overall economy. The report goes on to point out that this will boost the sector’s contribution to GDP to nearly ₦12.3 trillion by 2032, which represents 4.9% of the total economy.

Travel and tourism companies hoping to benefit from this growth, especially when it comes to lucrative international business tourism, must take a close look at digital payment options as part of their competitive offering.

“During the past four years operating as a licensed payment solution service provider in Nigeria, we have seen four-, three- and two-star hotels struggle to collect payment from international and virtual cards, especially from foreign customers due to limited payment facilities, and sometimes staff’s limited knowledge of payment options. This has cost hotels millions of Naira when they can’t charge checked-in guests or collect penalties from cancellations, resulting in many lost customers. Being able to charge international cards and accept foreign currencies like US Dollars will not only boost venue revenue, but foreign currency inflow for the country as a whole,” says Chidinma Aroyewun, DPO Group’s country manager in Nigeria which offers DPO Pay (https://bit.ly/3PrB6rB).

Cards are widely accepted around the world and are the preferred payment method of corporate travellers. Credit cards in particular offer longer payment terms, come with built-in travel insurance, accrue more loyalty points and frequent flyer miles and, most importantly, can have their spend data integrated into the company’s expense systems.

Offering a card service would allow venues to take direct booking and, should there be a cancellation, they would still be able to apply a small cancellation fee to cover costs. However, many business owners are wary of the ever-present threat of fraud, which has made many hesitant to offer a more varied payment offering.

“A Virtual Terminal allows businesses to take booking deposits through an online virtual card terminal and manually process payments without using a physical POS device. Guests can pay in the currency of their choice. The complete transparency of the system means you can display the original price, exchange rate, and final amount to your customer in their local currency or currency of choice. Our hotel merchants can now charge guests while they are making a telephone enquiry, upon receiving reservation requests from an OTA like Booking.com, or if they’re a walk in,” says Ms. Aroyewun.

By offering a secure payment method, businesses can build trust with their customers which will result in repeat business. This is especially important as fraudulent activity continues to rise, including an uptick of fake travel agency or airline websites.

Venues using Virtual Terminal can immediately process transactions and receive real-time payment confirmation without the need or cost of a physical point of sale device. Nor do they need any additional phone lines or hardware to operate the terminal. The setup is easy and the service can be added to their payment option without much hassle.

“Our clients are quick to share that the more payment options they offer, the more appealing they are to a wider client base. Customer experience is a key differentiator. Businesses will support a chain of hotels, or even a small boutique lodge, if they know that they can conduct business the way they prefer, no matter what country they are in. The added security of working with a known, trusted payment provider that is recognised across Africa will also help build trust and, ultimately, revenue,” Ms. Aroyewun concludes.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

DPO Group Enables USSD Payment Option in Nigeria

April 25, 2022

DPO’s country manager in Nigeria, Chidinma Aroyewun

One of Africa’s leading digital payments companies DPO Group has added a new form of payment that will allow merchants to get paid by their customers via a USSD code. This new feature allows merchants to receive payments from customers who don’t have access to mobile banking or a payment card.

Paired with DPO’s robust and scalable payment offering, USSD payments enable merchants to grow their customer base by accommodating as many payment methods as possible, getting paid from different shoppers across Africa. DPO has developed integrated payments technology to support businesses of all sizes in over 20 countries and accepts payments securely and swiftly in all currencies and through many payment methods including virtual cards, mobile money, and e-wallets.

According to DPO’s country manager in Nigeria, Chidinma Aroyewun: “As the shift to a cashless, digital economy becomes a reality, we want to make it easier for both the customer and merchant to carry out transactions. We are passionate about empowering our merchants with the tools they need to grow.”

DPO Group currently works with over 60,000 active merchants, including businesses in the eCommerce, travel, and leisure sectors. The company was founded in 2006 and since then it has grown to be a Pan-African PSP with more than 400 employees.

A total of 336.5 million USSD transactions were recorded in the first nine months of 2020 in Nigeria. In December 2020, the value of USSD transfer payments in Nigeria amounted to over 550 billion Naira.

Network International comprises a group of companies and is the leading enabler of digital commerce across the Middle East and Africa (MEA) region, providing a full suite of technology-enabled payments solutions to merchants and financial institutions of all types and sizes, including acquiring and processing services and a comprehensive ever-evolving range of value-added services.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Africa-focused Ecommerce Company DPO Group Acquired For $288 Million

July 30, 2020

Network International Holdings plc (the “Company” or “Network International”) (www.Network.ae), the leading enabler of digital commerce across the Middle East and Africa (“MEA”), has announced that it has entered into an agreement to acquire DPO Group (“DPO”), the leading, high-growth online commerce platform in Africa, for a sum totaling almost USD288 million. The amount will be almost entirely funded through the proceeds from an equity placing representing 10.0% of the Company’s existing issued share capital, USD50 million vendor consideration shares issued to Apis Growth Fund I, managed by Apis Partners (“Apis”), USD13 million consideration shares issued to the DPO co-founders, with any small remaining balance to be funded via existing debt facilities.

Simon Haslam, Chief Executive Officer DPO Group — **Simon Haslam, Chief Executive Officer**

“We are excited by the proposed acquisition of DPO, the leading high-growth online commerce platform operating at scale across Africa,’’ said Simon Haslam, Chief Executive Officer. “Africa is a vast and diverse continent, representing the world’s most underpenetrated, nascent and fast growing payments markets, where we have seen recent signs of an acceleration in those trends. DPO will further consolidate our presence in Africa, strengthen our position across the entire payments value chain and accelerate our growth. This acquisition will widen our capabilities across online, mobile and alternative payments; bring an extensive and diverse range of direct merchant relationships to our business; and provide a wider range of solutions for our existing customers. We look forward to bringing our two businesses together and welcoming DPO’s colleagues into our group. Together, we have a powerful combination to accelerate digital payments across our regions and deliver significant shareholder value.”
Read also:https://afrikanheroes.com/2020/07/12/foreign-direct-investments-in-east-africa-declined-in-2019-report/

Here Is What You Need To Know

DPO is the largest online commerce platform operating at scale across Africa

Rapid growth profile with revenue CAGR of c.40% from 2017–2019 and Total Processed Volume (“TPV”) CAGR of c.30% from 2017–2019. Revenues of USD16 million in 2019.
Leading e-commerce and mobile money services for >47,000 merchants across high quality brands.
Present in 19 countries across Africa with South Africa, Kenya and Tanzania representing major markets. Multiple distribution channels with on the ground presence to recruit merchants, combined with direct connectivity to acquiring banks.

Strong strategic fit and growth accelerator for Network International

Market: consolidates and accelerates our presence in Africa, the most underpenetrated and fast growing payments market in the world. Africa expected to represent c.40% of Network International total revenue by 2024 (27% in 2019), giving us an evenly balanced business in Africa across Merchant and Issuer Solutions.
Distribution and relationships: brings direct merchant and Mobile Network Operator (“MNO”) relationships, broadening our business in Africa across the entire payments value chain.
Capabilities and innovation: widens our capabilities and exposure in fast growing online payments and mobile money, enabling merchants to accept a wide range of payments methods.
Cross selling opportunities: combined incremental capabilities and solutions provide significant cross-sell opportunities to both Network International and DPO customers.
Disciplined capital allocation: acquisition expected to be broadly EPS neutral in 2022, including integration costs. Double digit ROCE within 3–4 years, and significantly higher thereafter.

DPO has seen strong current trading, following Covid-19 lockdowns

Digital and online payments market in Africa expected to grow at 19% CAGR over the next five years and Covid-19 expected to accelerate this growth.
E-commerce penetration in Africa is 0.3% of private consumption, versus c.5% in the United Kingdom and c.17% in China.
Following stringent lockdowns in DPO’s main market of South Africa during April:
DPO signed c.4,400 merchants in June 2020, an all-time high
TPV growth year-on-year was 27% in May (57% in constant FX) and 27% in June (49% in constant FX).

Financing and structure

DPO Co-Founders incentivised and aligned through rollover of USD13 million of their DPO ownership into Network International shares (the “Co-Founders Consideration Shares”) and a two year holding period (from the point of acquisition signing).
Acquisition consideration to be almost entirely financed through proceeds from a 10% equity placing, USD50 million vendor consideration shares issued to Apis (subject to a three month lock-up from the point of acquisition completion), and the Co-Founders Consideration Shares, with any small remaining balance funded by existing debt facilities.
Completion of the Transaction is expected in Q4 2020, subject to customary closing conditions including regulatory and anti-trust.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

African Businesses Can Now Move Online Courtesy Of Mastercard and DPO Partnership

April 29, 2020

African digital payments company, DPO Group, has launched an e-commerce store that is powered by Mastercard ’s payments gateway technology. Through this platform, DPO hopes merchants across Africa will be able to swiftly move their businesses online and continue to trade with their customers.

“The COVID-19 pandemic is not only a human tragedy, but it is also having a growing economic impact and is forcing companies everywhere to make changes to their businesses. SMEs are the lifeblood of the economy in Africa and many are already struggling to be visible and trade in this unusual environment, with many of their customers now staying at home,” says Eran Feinstein, CEO of DPO Group.

“We are pleased to be partnering with Mastercard on this timely initiative to try and address some of the challenges businesses of all sizes are facing, working with merchants to ‘reinvent’ their business by offering a fast, secure online capability, which they may not have had access to before.”

Here Is What You Need To Know

The end to end e-commerce solution, called the ‘DPO Store’, is available in the 19 countries in which DPO operates. Initially targeted at essential services such as supermarkets, food stores, pharmacies and chemists, merchants are provided with a free website and an integrated digital payments function which is fully connected to the DPO and Mastercard payments gateway platform meaning that all forms of payment including cards and mobile money can be accepted.
The website is customised for each merchant to reflect their brand and it includes stock management capability, a stock-alert system when product inventory runs low and real-time order management.
Since the product was soft-launched in Kenya in the beginning of April, thousands of transactions have taken place.
In 2018, DPO Group and Mastercard entered into a partnership whereby DPO is authorised to act as a Pan-African payments switch via Mastercard Payments Gateway Services, meaning it can independently authorise transactions with no need for bank integration.

“At Mastercard, we see a connected world where opportunity and prosperity are possible for everyone, everywhere. We are leveraging our network, insights, technology and partnerships — like this one with DPO — to deliver the resources small business owners need now to help them sustain their business as they quickly adapt to a new way of operating and evolving customer needs through e-commerce,” says Adam Jones, Area Business Head for East Africa at Mastercard.

Read also: CDG Invest Pours About $1.7 Million Into Seven Moroccan Startups In The First Edition Of 212 Founders
African tech startup hubs
Currently, 55 businesses providing essential products and services have already signed up to the DPO Store in Kenya, Uganda, and Zambia.

For more information on how to move your business online using the DPO Store platform, click here

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer