African payment service provider Direct Pay Online (DPO) Group has acquired local e-commerce payment platform PayFast, in what it claims is the largest payment service acquisition deal in Africa.
Founded in 2007, Cape Town-based PayFast offers a payments processing service for the e-commerce market across the African continent. The company enables easy, secure and instant transfer of money between online buyers and sellers.
The integration of PayFast into DPO’s services will increase the range of payment options available to DPO’s business customers, while providing a Pan-African solution to PayFast’s existing customer base.
The merger, backed by equity asset manager Apis Partners, enables DPO’s services to be available on a single platform to both DPO and PayFast merchants, improving their capacity to do business across Africa and worldwide.
Speaking at the announcement event in Cape Town today, Offer Gat, chairman and co-founder of DPO Group, said that through the acquisition, DPO will provide services to over 100 000 merchants across 18 African markets.
“This deal, which we believe is the largest acquisition by a payment service provider (PSP) in Africa, reinforces our position as a leading PSP on the continent and is an important step forward in our strategic growth across Africa.
“The combination of DPO Group and PayFast will greatly increase the ability of merchants on our platform to do business with their clients, both within and outside of Africa. It will also allow DPO to continue to improve merchant services, allowing more merchants to transact more broadly at lower cost.”
PayFast uses a facilitator model to process payments, together with its partner banks, providing a turnkey solution to over 55 000 South African merchants.
The acquisition deal was executed through a mix of shares and cash, with the PayFast management team remaining key shareholders in DPO.
Founded in 2006, DPO is a Nairobi-headquartered PSP, and has developed the technology to enable businesses and individuals across 18 African countries to make payments online and offline with all currencies and payment methods, including major cards, mobile money and e-wallets.
DPO currently works with 45 000 merchants, including over 60 airlines, and thousands of hotels, restaurants and travel agents in Africa.
The PayFast deal follows DPO’s previous acquisitions, which includesVirtual Card Services, PayGate and SiD Secure EFT.
Also speaking at the event, Jonathan Smit, MD and co-founder of PayFast, noted: “Integrating our processing and facilitation capability with the range of online payment services offered by DPO and its huge geographical reach across 18 countries in Africa is an extremely exciting opportunity for both companies.
“The coming together of two leading online payment specialists will have a positive impact on the African payments landscape and create better future career opportunities for our current and future talent. I am excited to be working with the DPO team in growing the business further in the years ahead.”
In 2016, DPO received investment from Apis Growth Fund, a private equity fund managed by Apis Partners. The fund, according to the company, supported this investment and will continue to facilitate DPO’s expansion across Africa, the broadening of its client base and investment in technology.
Eran Feinstein, CEO and co-founder of DPO, added: “PayFast’s deep experience of payment processing and facilitation in South Africa complements and expands the services we can offer our business customers via the most diversified and robust suite of online payments options available in Africa. The integration of PayFast and the wealth of e-commerce platforms it already works with is an extremely attractive addition to the group. It’s about adding value for our merchants, providing more choice and freedom for businesses to pay and be paid throughout Africa.”
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