As its other businesses continue to struggle, Multichoice is making a play at payments.
Multichoice Group has announced that it is launching a new integrated payments platform in a partnership with Rapyd, B2B payment processing platform, and General Catalyst, a venture capital firm that provides early-stage and growth equity investments.
The platform, to be housed under an entity called “Moment”, will aim to offer payment infrastructure for businesses across Africa to help them collect and make payments easier, quicker, and more affordable in any manner that their buyers or suppliers prefer.
Additionally, the platform will offer options for consumers to spend and save money more wisely with an aim to “transform the African payments landscape by making digital payments more accessible and reliable for domestic, cross-border and global payments.”
Multichoice’s stock was down by almost 2% by market close from its opening price , perhaps pointing to the shareholders lack of faith in the company’s ability to make a mark in an already extremely competitive payments space.
“We are excited about our venture with Rapyd and General Catalyst. It will address the need for an accessible and reliable payment platform for many small businesses and millions of consumers in Africa. Investing in this venture is a logical progression for us, as we already process payments every month from 22 million households across 50 countries in Africa. Moment fulfills our strategy to expand our ecosystem, by investing in adjacent businesses that provide scalable services, underpinned by technology”, said Calvo Mawela, MultiChoice Group CEO.
A necessary pivot?
Multichoice’s core business, DStv, has been struggling over the last few years. According to Daily Investor, between 2015 and 2018, DStv Premium subscriptions declined from 2.35 million to 1.92 million and stood at 1.4 million as of end 2022. MultiChoice’s latest annual financial results also show a 6% decline in Compact and commercial packages.
The platform’s average revenue per user (ARPU) has also been on a downward spiral, declining from R317 per month in March 2018 to R269 in March 2022 for 90-day active subscribers.
The company’s other bet, Showmax, reportedly grew its subscriber count by 68% last year and 50% the year before but because the service’s numbers do not get reported on Multichoice’s financial results, they cannot be put into context with regard to their impact on its bottom line.
According to Multichoice, the long-term plan for Moment is to provide the infrastructure for pan-African payments for the 44 million small businesses operating on the continent. It is also to turn the 90% of retail transactions that are currently taking place in cash, into digital payments.
“Moment gives MultiChoice another opportunity to make a meaningful contribution to the economic development of the African continent. It will play a key role in accelerating cash-to-digital payments for all consumers and businesses and making the continent more investment ready for global players, by connecting payments from Africa to the world,” added Mawela.
Through its 20 million subscribers on its pay-tv DStv, Multichoice already claims to process over $3.5 billion annually in payments. The Johannesburg Stock Exchange-listed entity also has majority shareholding in Showmax, a subscription video-on demand service, and a minority stake in Betking, an online betting service.
Beyond just powering payments for its own services, according to Multichoice, Moment will in the long term also make a play in facilitating payments for small businesses, drive adoption of other real-time payment methods across all markets, and facilitate trade for importers and exporters using more than 40 currencies in over 130 countries.
With entry into payments, Multichoice seems to be looking to divest away from its struggling cable television bets and streaming into an industry which is currently dominated by the likes of Flutterwave, Paystack, Chipper Cash and MFS Africa. Whether this will be the redemption of the company or prove to be the last kicks of a dying horse remains to be seen.