Pan-African media giant, MultiChoice has launched a payments platform called Moment. The company, which houses popular brands such as Showmax, DStv, GOtv, and SuperSport will be doing this in concert with Israeli unicorn, Rapyd, and venture capital firm, General Catalyst.
General Catalyst's portfolio includes Stripe, Rapyd, Monzo, Airbnb, Hubspot, and Canva.
MultiChoice's new venture will see it provide payment solutions for businesses and individuals, enabling domestic and global payments. Moment will provide cross-border payments for businesses on the continent, drive the adoption of real-time payment methods and enable individuals to save and spend better.
While the company plies its trade in Africa's media space, CEO Calvo Mawela believes this move is a logical progression considering the MultiChoice Group already processes $3.5 billion in annual payments from 22 million households.
Why is a media company getting involved in the notoriously difficult, but potentially rewarding African fintech market? This article attempts some answers.
Perhaps the question should be why not fintech? African fintech revenues are expected to reach $30 billion by 2025. With growing Internet and broadband penetration, increasing smartphone ownership, and high cash usage, experts see significant growth potential in Africa's fintech sector.
"Moment fulfils our strategy to expand our ecosystem by investing in adjacent businesses that provide scalable services, underpinned by technology," Mawela says.
Its subscription-led business model means MultiChoice deals with many payments, and perhaps justifies this decision. Additionally, its largest brands — DStv, GOtv, and SuperSport — attract millions of viewers across Africa and suggest it could tap into that market.
Its official communication also reveals that it aims to make digital transactions more accessible to the 350 million unbanked and under-banked Africans. But how can the company compete against established fintechs and what are the possible implications of its partnership with Rapyd and General Catalyst?
Swimming with the sharks
In addition to being Africa's fastest-growing startup segment, the fintech sector also has a reputation for having a high number of players. McKinsey estimates that there are almost 2,600 fintechs on the continent.
A few of these players like Interswitch, Flutterwave, MFS Africa, and Paystack are well-capitalised and play in multiple markets. Flutterwave, for instance, offers its services in 34 countries while Paystack does so in four.
Others like Interswitch and MFS Africa have been around for longer and are well entrenched in the ecosystem. Still, there may be space for one more player. Approximately 10% of transactions on the continent are done digitally and about 350 million people are unbanked or under-banked in sub-Saharan Africa alone.
While many Africans lack access to digital financial services, those who have access often use more than one service provider. This absence of customer loyalty makes it harder for fintechs to build viable businesses. This could explain MultiChoice's decision to partner with Rapyd and General Catalyst.
While the company has not said much about the details of this partnership, it's safe to assume that Rapyd will provide the fintech infrastructure for MultiChoice. The Israeli fintech already has footprints in Africa, offering payment options in places like Cameroon, Egypt, Ghana, Mauritius, and Kenya.
General Catalyst, on the other hand, could provide it with funding as it bids to provide merchants with cross-border payment solutions. But before that happens, it must consider driving adoption.
A good starting point would be its entertainment brands DStv, GOtv, and Showmax where users pay monthly subscriptions. On Showmax — its streaming service — it offers users at least three payment options, including card payments, MTN airtime, and a Showmax voucher. This ensures that users can pay using their preferred payment method. But by replacing one of these payment options with Moment, it could quickly get its first set of users.
Still, even though it processes 22 million payments monthly, there is no guarantee that it will sway enough customers to justify the launch of a fintech solution. However, it can aid adoption by offering incentives such as discounts when payments are done using Moment. PiggyVest does something similar where it offers users Piggy points for withdrawing to the PocketApp.
Ultimately, Moment's vision isn't to provide digital financial services for MultiChoice users alone and it must figure out how to get new users. This is where Rapyd's experience would come in handy. I have posited that the fintech could provide the fintech infrastructure for MultiChoice, but it could also be a route to gain market share within Africa.
What are MultiChoice's chances of success?
Without a future-revealing crystal ball, it is impossible to authoritatively say how MultiChoice's bet could go. However, it has a good base to begin operations with the $3.5 billion it processes annually.
Additionally, it is one of the largest media organisations on the continent, with a presence in 16 countries. This reach and its media assets can be used to get Moment in front of millions of potential users at lower costs than its competitors.
Just like OPay used businesses in several verticals to drive its customer acquisition efforts, MultiChoice's media reach could be instrumental to Moment's spread. However, it is one thing to attract customers and another to retain them, especially with other players watching on.
It would need to offer users something they do not already get from other fintech players, and one can argue that cable or video-on-demand users already use some form of digital payment service. Therefore, how it gets users outside the traditional financial system could be key to its survival.
Although the company is not clear on the channels through which it processes its $3.5 billion annually, it is worth noting that in developing economies, even those who own accounts frequently use cash. About half of the account owners in developing economies did not make a digital payment throughout 2021.
This suggests that despite having an account, making digital payments still comes with some challenges. A 2017 study of farmers in Uganda found that while mobile money payments appeared to be a better option, the limited use cases for it made it a hard sell. Time will tell if Moment can get its users to make it first choice.
MultiChoice's foray into fintech is a curious decision, but its strong brand presence and significant volume of payments processed annually could potentially provide it with a strong foundation. However, its ability to attract new users, while leveraging partnerships with Rapyd and General Catalyst could be key to its success.