South African payments processing service PayFast has been acquired for an undisclosed amount by the Nairobi-based DPO Group.
The group, a leading African payment service provider (PSP), announced the acquisition yesterday as a deal executed through a mix of shares and cash with the PayFast management team remaining key shareholders in DPO Group.
The group will be providing services to more than 100000 merchants across 18 African markets after the transaction.
According to a communications specialist representing the service providers, DPO acquired payment service provider PayGate for R100million in 2016 and PayFast is set to be much more as PayFast is the biggest in Africa and there will be no job cuts as a result of the acquisition.
The specialist said the deal would not only involve a cash component but a share swop component and current PayFast shareholders will also become shareholders in DPO Group.
According to DPO, the group consisted of fewer than 100 employees when it acquired PayGate and today has more than 250 employees.
PayFast employees will become DPO employees from the outset in every sense, including pension plans, and will be granted the same benefits DPO employees enjoy and will become part of the larger DPO Group, the specialist said.
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 will allow all the group's services to be available on a single platform to both DPO Group and PayFast merchants, significantly improving their capacity to do business not only across Africa but also worldwide.
Offer Gat, chairperson and co-founder of DPO Group, said PayFast was a natural fit for the group and this deal strategically follows its acquisitions of PayGate, VCS, Paythru and SiD since 2016.
“This deal, which we believe is the largest acquisition by a 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 Africa. Finally, it will allow DPO to continue to improve merchant services, allowing more merchants to transact more broadly at lower cost,” said Gat.
Eran Feinstein, chief executive and co-founder of DPO Group, added that PayFast’s deep experience of payment processing and facilitation in South Africa complements and expands the services the group can offer its business customers through 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,” said Feinstein.
PayFast, founded in 2007, uses a facilitator model to process payments, providing a turn-key solution with its partner banks and provides a single point of contact for its clients.
This provides a simple way for businesses to receive payments, saving them considerable time, effort and paperwork, while ensuring they have access to a broad range of payment types and bank-level security.
Peter Harvey, managing director and co-founder of DPO, said the demand from African and global companies to make and receive payments reliably, securely and quickly, is growing exponentially.
“We are seeing this trend from both our SME and multinational customers. DPO Group is now in an even better position to not only meet that demand but accelerate opportunities for businesses and consumers,” said Harvey.