The Opportunity

Jump to section

• Overview & contents
• i. Important Notice and Basis of Preparation
• 1. Executive Summary
• 2. The Opportunity
• 3. Market and Regulatory Context
• 4. Product, Technology and Security
• 5. Go-to-Market and Unit Economics
• 6. SWOT and Competitive Position
• 7. Financial Projections
• 8. Cash, Funding and the Balance Sheet
• 9. Sensitivity and Scenario Analysis
• 10. Risk Analysis
• 11. Regulatory, Compliance and Licensing
• 12. Organisation and Management
• 13. Implementation Roadmap
• 14. Key Performance Indicators
• 15. The Offer, Returns and Recommendation
• 16. Assumption Register
• A. Appendix A: Consolidated Financial Summary
• B. Appendix B: Volume, Pricing and Unit Economic Schedules
• C. Appendix C: Funding, Cash and Balance Sheet Schedules
• D. Appendix D: Risk Register
• E. Appendix E: Glossary

2.1 Where card acceptance stops working

South African card acquiring is priced ad valorem. A merchant pays a merchant discount rate expressed as a percentage of transaction value, out of which the acquirer funds interchange payable to the card issuer, scheme assessment fees, switching and sponsorship costs, and its own margin. The model works for consumer retail, where average transaction values sit in the hundreds of rand and the fee is small in absolute terms. It breaks down entirely at business-to-business ticket sizes.

Real-time low-value credit-push infrastructure changes the economics of this problem, because the fee can be levied per transaction rather than as a percentage of value. The per-transaction limit on that rail was raised from R3 000 to R50 000 in August 2024, and a request-to-pay capability enabling person-to-merchant payments was introduced in December 2024. Both changes are what make a trade-counter proposition possible at all — before them the rail could not carry a R48 000 invoice and could not be initiated by the merchant.

2.2 Two merchant populations, one platform

2.3 Why software distribution rather than field sales

The dominant customer acquisition model in South African small-merchant acquiring is hardware-led: a low-cost card reader, consumer-grade marketing, and a field sales force. That model has been capitalised at a scale substantially beyond anything a seed round can match, and competing with it directly on those terms would be a straightforward way to destroy the capital raised.

Software distribution inverts the cost structure. Where a practice management vendor or trade-counter enterprise resource planning vendor already holds the merchant relationship, payment acceptance becomes a feature of software the merchant has already bought rather than a product requiring separate persuasion. Acquisition cost falls to the cost of enabling the partner and supporting activation.

The trade-off is explicit and it is modelled: 18 per cent of net revenue on partner-originated merchants is paid away as revenue share, which is R29.9m in FY2031 — the second largest single deduction from net revenue after cost to serve. That is the price of the channel, and it is deliberately generous at seed stage because the first two integrations determine whether the plan is viable at all.