Digital payments giant hopes for boost from UAE-Africa trade talks

Mastercard

• Revenues up 55.8% in Africa and 21.5% in the Middle East
• UAE-Kenya trade deal to open more doors to support economies

Dubai-based digital payments giant Network International is hopeful that “more doors will open” for it across Africa as the UAE starts free trade deal talks on the continent.

The Middle East and Africa-focused company, which generated nearly 30 percent of its revenues from Africa last year with key markets including Kenya, Egypt and South Africa, said it will seek further expansion as talks on a comprehensive economic partnership continue.

“The UAE’s ongoing talks to enter a bilateral trade deal with Kenya is expected to usher in a new era of economic partnerships,” said CEO Nandan Mer.

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“This will hopefully open more doors for Network to support businesses and economies from both sides through our innovative solutions that are geared towards simplifying commerce and payments.

“As this exciting development unfolds, we will continue to build partnerships with financial institutions in Africa and provide them with services across the entire payments value chain – building on the same formula that has made us an industry leader in the UAE and across the Middle East.”

With digital payments making up just 12 percent of total consumer transactions in Kenya and an overall consumer spending pool of about $100 million, it is a target market for growth for Network International.

The company also has data hubs in Egypt, Nigeria, Ghana and South Africa and owns DPO Group, Africa’s largest and fastest-growing payment service provider, which works with more than 63,000 online merchants across 21 countries on the continent.

Last month, the UAE signed an agreement with Kenya to begin talks on a comprehensive economic partnership, the first of its kind between the emirates and an African country. Non-oil bilateral trade between the two countries grew to $2.3 billion last year.

Last week Network International announced that revenue for the first six months of 2022 was up 31.1 percent to $205 million compared to the same period last year. This was down to broad-based improvement across all regions and a $15 million contribution from the newly acquired DPO Group. 

Revenues in the Middle East and Africa increased 21.5 percent and 55.8 percent respectively, supported by a 43 percent increase year on year in the total value of payments processed as consumer spending remained robust and digital payments accelerated in the company’s key markets.

Profit for the period was $32 million, up 113 percent year on year, the company said.

Mer also highlighted the company’s market entry into Saudi Arabia, saying it is progressing well, having secured a second new customer this year. 

“Saudi Arabia is vital to our growth strategy – it’s a market where we expect to generate revenues of at least $50 million in the medium to long term,” he told AGBI.

“We continue to build momentum after completing our in-country technology deployment and connecting with domestic and international card schemes.

“We have an active pipeline that’s strengthening confidence in Network’s ability to secure more wins in the kingdom throughout the rest of the year and beyond.”

Abdulaziz Al-Dahmash, Network International’s managing director for Saudi Arabia, agreed that the organisation’s expansion into Saudi Arabia continues to build momentum.

“We signed two financial institutions for issuer solutions processing services during the first half and fully completed our in-country technology deployment,” he said.

“We remain committed to investing in the country and providing our customers with cutting edge payment solutions.”

Looking ahead, while Network International said it is mindful of global macroeconomic challenges, it added that its major markets “continue to see solid trading conditions”. 

“Given the solid performance seen in the first half, financial guidance for the full year is reconfirmed, where we expect group revenue growth of 27-29 percent year-on-year, with modest EBITDA margin expansion,” the company noted in a statement.