Paymentology looks to strengthen its African roots

Global issuer processor Paymentology is looking to grow its business in Africa and deepen its African roots.

"Africa holds a special place in Paymentology's heart, as it's where our journey began. We have deep roots here, and it's incredibly important for us to continue doing business on the continent," Paymentology's CEO Jeff Parker told Connecting Africa in an interview.

Paymentology's cloud-based processor equips banks, fintechs and enterprises with the technology and expertise to issue and process any type of physical or virtual card worldwide.

"We're proud to support fantastic fintechs, banks and businesses that are making a real difference by promoting financial inclusion," Parker said. "This isn't just a box to tick for us – inclusion is at the core of our company identity."

African vision realized

The company was formed following the 2021 merger of Tutuka – a South African payments company founded in 1998 – and Paymentology UK, creating what Parker calls "a global payments processing powerhouse."

Tutuka maintained a strong market presence in Africa, Asia-Pacific and Latin America, while Paymentology built significant operations in Europe and the Middle East. Together, the two payment innovators created a company that now supports over 400 clients in over 50 countries and has processed over a billion transactions.

Since the merger, the group's combined headcount has doubled, and the company is continuing to expand into new regions.

Parker said the company has a very strong base in South Africa, owing to its roots in the country. Its other African operations include Kenya, Botswana, Zambia, Zimbabwe, Côte d'Ivoire, Senegal and Tanzania.

When it comes to further expansion, he said the group is strategically growing its footprint in these nations and is also "actively exploring additional jurisdictions with regulations friendly to the cutting edge of cloud-based fintech," which will enable it to introduce its payments platform in partnership with local businesses.

Parker was appointed as the new CEO of Paymentology in December 2023, and in early 2024 embarked on a world tour of the company's businesses – including a visit to its teams and clients in Johannesburg and Cape Town, South Africa.

Paymentology aims to be "the global platform of choice for card programs" and Parker believes that Africa holds a lot of opportunities for the company to grow while providing financial inclusion for locals.

"As regulations in various African countries evolve and upgrade and embrace digital payments, we anticipate even more opportunities to make a positive impact. We're excited about the prospect of doing even more to drive positive change across Africa and continuing to be a part of the continent's growth story," he said.

Paymentology's work across Africa

Paymentology powers fintech services for several major companies in South Africa, including Standard Bank, Access Bank, Adumo, Santam, Massmart, Pick n Pay, Liberty Group, Mukuru, Mama Money and Spar.

"We have taken a very focused path in developing the next generation of payments. Paymentology is now the perfect partner for neobanks entering the market, traditional banks launching a digital-first spin-off, telcos embracing mobile financial services and fintechs with a wide range of goals," Parker said.

The company has been in Africa for over two decades and helps clients navigate on-soil and regional data regulations, allowing them to launch their products on any public or private cloud, adhering to regional compliance requirements and data residency considerations.

Parker said the group's recent innovations include the creation of a single platform to craft any type of card product – be that debit, credit or prepaid – that is ready to connect to any payments rails ranging from Mastercard and Visa to local networks.

"We're also supporting the digitization of payments, employing tokenization to make payments seamless and secure, improving authorization rates and increasing consumer privacy," the CEO said.

The Paymentology South Africa team. (Source: Paymentology)

The group has deployed its platform to enable more than 50 shopping malls in South Africa to offer digital gift and rewards cards to shoppers directly on their mobile phones.

"Paymentology is also supporting some incredible initiatives such as enabling student grants to be disbursed by the South African government through virtual cards and paying farmers in Côte d'Ivoire a fair price for their cocoa and coffee harvests on prepaid cards," Parker explained.

"Our strategic partnerships with Standard Bank and Access Bank in South Africa enable us to provide comprehensive solutions that combine essential banking licenses and compliance procedures with our own advanced payments products and expertise," he added.

The group also streamlines the provision of card programs by non-financial organizations, like retailer Spar, which Parker said is boosting financial inclusion throughout the country and diversifying the payments products available to consumers.

"Fintech and mobile payment options are revolutionizing access to financial services in underserved, remote communities, significantly aiding financial inclusion. By leveraging technology, fintech companies offer convenient, low-cost solutions that bypass traditional banking infrastructure barriers," Parker said.

Parker said he is proud of Paymentology's collaboration with African remittance platforms like Mukuru and Mama Money, which he believes are not only driving financial inclusion but also spearheading positive social and economic change across the continent.

Cloud-native payments

Paymentology claims to have developed the first cloud-native processing platform for payments.

Parker said that cloud-native platforms – which are designed from the ground up to reside in the cloud – take a different approach to legacy systems, which are usually designed to be implemented by banks or fintechs with dedicated servers and on-site infrastructures.

"Our platform is designed to be seamlessly hosted with all major cloud infrastructure providers (AWS, Oracle, Azure, Google Cloud and others), and can take advantage of a range of benefits from cloud hosting," he explained. "This flexibility is proving crucial for financial institutions, fintechs and businesses as it allows us to integrate our platform into their preferred cloud environment without imposing additional costs or specific infrastructure requirements."

Parker believes that African regulators and governments could help enhance fintech adoption through supportive regulation and policies, especially in terms of how they regulate cloud services.

"Many countries in Africa are not cloud-friendly, requiring on-soil hardware forcing fintechs to invest in costly hardware. Additionally, introducing new licensing frameworks that facilitate the entry of new players will foster innovation and competition in the fintech space," he said.

AI's role in fintech

When it comes to artificial intelligence (AI) he said that financial institutions, fintechs and payment companies have long embraced AI while the rise of generative AI (GenAI) has revived interest in this area.

"While AI has opened up possibilities for banks and fintechs in areas such as combating fraud, GenAI introduces fresh use cases that can enable financial institutions to build significantly improved services," he said.

Parker said GenAI can facilitate more efficient customer relations services, streamlining processes without requiring any coding skills.

"Paymentology is currently experimenting with Generative AI applications, especially in data intelligence and fraud prevention. As AI continues to evolve, its integration into fintech promises unprecedented innovation, efficiency, and customer-centric solutions, shaping the future of the industry," he added.

Payment trends in 2024

Regarding trends in Africa's mobile payments space, Parker said he is seeing a wave of digital payments enablement using issuers' own wallets.

"Despite market penetration still being dwarfed by Apple Pay and Google Pay, merchants are equipping contactless payment capabilities across the African continent. Issuers, such as banks, are taking the lead in providing this contactless payment capability, creating in-house solutions, and working closely with the industry to better digital wallets to merchant and consumer needs," he explained.

He also said that virtual cards are becoming more affordable to issue throughout Africa.

"This is a key shift in the market, as virtual cards provide the same capabilities and security features as physical cards and can be used online and abroad, but do not require days or weeks to arrive by post and multiple virtual cards can be linked to each account," he said.

"It's important to point out that both digital wallets and virtual cards are heavily dependent on cloud computing, and the digital transformation of more and more banks in Africa will only accelerate the rise of mobile payments," Parker added.

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He also predicted that there will be more focus on environmental, social and governance (ESG) values when it comes to financial solutions and the payments sector will soon witness a shift toward eco-friendly services, led by innovative fintechs and startups.

"Digital technologies will dominate, reducing reliance on physical currency and plastic cards, thus addressing environmental concerns and global chip shortages," he concluded.

*Top image is of Paymentology CEO Jeff Parker. (Source: Paymentology,)

— Paula Gilbert, Editor, Connecting Africa