Many projections indicate that the future of payment in Africa is looking promising, with digital solutions and fintech innovation driving financial inclusion, economic growth, and improved access to financial services for millions of people.
In Nigeria and beyond, payment challenges are indeed a significant issue that needs to be addressed. Despite the progress made in the fintech sector, there are still several hurdles to overcome to achieve widespread access to efficient and inclusive payment systems in the country.
Recently, MultiChoice Group, a leading entertainment and media company in Africa, revealed its collaboration with B2B payment processing platform Rapyd and venture capital firm General Catalyst to introduce an integrated payments platform called “Moment.”
Interestingly, the partnership is seeking to provide businesses across Africa with an efficient and affordable payment infrastructure, enabling them to collect and make payments in a manner preferred by their buyers or suppliers.
The platform also seeks to empower consumers to manage their finances effectively, transforming the African payments landscape and expanding accessibility to digital payments.
Market Response and Shareholder Concerns
A 2019 securities filing report revealed that MultiChoice has 13.9 million subscribers, across Africa. And the Nigerian market controls over 45 percent.
The South African firm stands a big chance of losing many of its subscribers after it announced an upward review of the costs of its DStv and GOtv packages by 17 percent, in text messages sent to subscribers. The 2023 hike is coming barely a year when the prices were reviewed upward by the firm.
Meanwhile, following the announcement, MultiChoice’s stock experienced a decline of nearly 2% by the market’s close, suggesting a lack of confidence from shareholders regarding the company’s ability to establish a significant presence in an already fiercely competitive payments sector.
The skepticism among investors might stem from the challenges faced by Multichoice’s core business, DStv, over recent years, as evidenced by declining subscriptions and average revenue per user (ARPU) figures.
Multichoice’s Strategic Approach and Rationale
Africa still faces various payment-related issues, including limited banking infrastructure, a large unbanked population, and a high reliance on cash transactions. These factors contribute to inefficiencies, delays, and security risks in the payment ecosystem
Calvo Mawela, CEO of MultiChoice Group, expressed enthusiasm for the partnership with Rapyd and General Catalyst, highlighting the need for a reliable and accessible payment platform for millions of consumers and small businesses in Africa.
Mawela emphasized the strategic alignment of this venture with Multichoice’s existing payment processing activities, as the company already handles monthly payments from 22 million households across 50 African countries.
The establishment of Moment aligns with Multichoice’s ecosystem expansion strategy, focusing on investing in scalable services supported by technology.
DStv’s Performance and Showmax’s Potential
MultiChoice’s primary business, DStv, has encountered difficulties in recent years. Between 2015 and 2018, DStv Premium subscriptions declined from 2.35 million to 1.92 million, further decreasing to 1.4 million by the end of 2022. Furthermore, MultiChoice’s latest financial results indicated a 6% decline in Compact and commercial package subscriptions.
The average revenue per user (ARPU) for DStv has been on a downward trajectory, falling from R317 per month in March 2018 to R269 in March 2022 for 90-day active subscribers.
In contrast, Showmax, Multichoice’s alternative streaming service, witnessed a notable increase in subscriber numbers, with a reported growth rate of 68% in the previous year and 50% in the year before that.
However, since Showmax’s financial results are not disclosed separately, it remains challenging to assess its impact on Multichoice’s overall financial performance.
Long-term Goals of Moment
Multichoice envisions Moment as a pan-African payments infrastructure that will serve the 44 million small businesses operating on the continent.
The platform aims to facilitate the transition from cash to digital payments, to convert the 90% of retail transactions that currently occur in cash into digital equivalents.
By doing so, MultiChoice aims to stimulate economic development in Africa and enhance the continent’s investment readiness on a global scale, connecting African payments to the wider world.
MultiChoice Group’s partnership with Rapyd and General Catalyst to launch the integrated payments platform Moment signifies the company’s strategic move to address the demand for accessible and reliable payment solutions for African businesses and consumers.
While Multichoice’s core business, DStv, has faced challenges with declining subscriptions and ARPU figures, Showmax has experienced substantial growth.
MultiChoice aims to leverage its existing payment processing capabilities and expand its ecosystem through Moment, aiming to transform the African payments landscape and