Fintech startups in South Africa are up for a big game. China’s leading payment service provider, Alipay which has just announced that it is going on its Initial Public Offering (IPO) on the Shanghai Stock Exchanges’ STAR board and the Stock Exchange of Hong Kong (HKEX/SEHK), has entered the South African fintech market, big time. In a new partnership with leading South African telecom company, Vodacom, Alipay will assist Vodacom on a new “super app” that will allow customers to make payments, stream video and make travel arrangements, among a host of other services.

“The next six months are going to be very busy,” Vodacom’s CEO for financial services, Mariam Cassim said, today. 

Here Is What You Need To Know

• The new partnership between Alipay and Vodacom will help to aggregate different merchants and service providers so that users can do all their business online and “never have to leave the app”.
• Vodacom’s CEO explained that the company is already in the process on signing up and registering merchants and businesses for the new platform.
• She said the platform will be “network agnostic” as it will be available to all South Africans, even those not on Vodacom.
• Vodacom will pay Alipay parent company Ant Group fees for the use of the technology.
• Vodacom has recently launched an Android-based point of sale device for merchants as part of the development.
• Group CEO of Vodacom Shameel Joosub said the service would only be available in SA at its launch. In other operating countries, some of the new services will be offered through Mpesa, run by Vodacom affiliate, Safaricom.

“This partnership is a significant milestone in promoting greater financial inclusion within the communities in which we operate, accelerating our financial services aspirations across Africa. We already offer South African customers an ecosystem of innovative digital financial services products, but this technology partnership with Alipay will enable us to be on par with leading global digital counterparts quicker and more efficiently,” said Shameel Joosub. 

• Tencent’s WeChat is an example of a super app as it allows users to order food, hail rides, play games and make payments on a growing list of services.

Read also: Uber Launches Its First Inter-city Bus-Sharing Service In The World In Egypt

The Battle For Who Controls Over 90% Of South Africans Who Are Financially Included Wages On

• In recent times, it has appeared the war is between Vodacom and its competitor MTN. Both have been investing aggressively in mobile payments and financial services in the last years. 
• In 2012, MTN first launched its mobile money platform locally before pulling the plug in 2016 because of a lack of commercial viability as three-quarters of the population had bank accounts. Vodacom shut down its M-Pesa mobile money service in SA in the same year, citing similar reasons. Since then Vodacom decided to go in a different direction, concentrating its efforts on insurance and lending.
• In June, MTN said its mobile money platform — MoMo — had registered more than one-million users since its relaunch in February. Fixed-line operator Telkom recently began the process to rebrand and repurpose the almost 70-year-old Yellow Pages into an online marketplace, as part of an effort to capitalise on the growth of e-commerce and grow new revenue streams.
• While MTN is the largest mobile operator in the entire African continent, Vodacom dominates the market in South Africa.

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.