Network International has announced a solid first quarter with constant currency revenue growth of 16% y/y. The business is a leading enabler of digital commerce across the Middle East and Africa, providing a full suite of technology-enabled payment solutions to merchants and financial institutions of all types and sizes.
Nandan Mer, Chief Executive Officer, commented: “We have seen a solid start to the year. This demonstrates economic strength across key markets, supported by the accelerated transition from cash to digital payments and continued successful strategic execution of our growth-oriented strategy. Merchant Services performance remains very strong, with trends reflecting buoyant UAE consumer spending and the region’s attractiveness to international visitors. Merchant Services performance across Africa has improved when compared to the exit rates we saw at the end of 2022 and the launch in Egypt is progressing well. Momentum in Outsourced Payment Services has also improved, with growth supported by new business and continued strength in the existing portfolios. We are encouraged by the start to the year.”
Rohit Malhotra, Chief Financial Officer, commented: “Financial performance in the first quarter has underpinned our guidance and outlook for the full year. Revenue growth of 16% y/y in constant currency saw good delivery from across the business, with Merchant Services showing particularly strong growth and Outsourced Processing seeing an uptick in momentum compared to the exit rate in 2022. We have maintained disciplined cost control, with a corresponding strong margin position. Cash generation is healthy, and the balance sheet remains strong, with our capital allocation policy focused on deploying investment towards new growth opportunities, as well as the ongoing execution of our USD 100 million share buyback programme.”
Growing International Presence
Good progress in newly launched Egypt Merchant Services
Merchant Services in Egypt launched in January and is progressing well, with transactions live. Network is focused on the fragmented and underserved SME segment, enabling SMEs with digital payment acceptance methods through point-of-sale devices and ‘Tap-on-Phone’ smartphone app technology.
Strong Customer Growth Across the Business
New merchant wins remain at record levels
Following a record year of merchant wins in 2022, strong momentum in new signings continued through Q1 2023. Network secured several new merchants including Tourvest Holdings, the duty-free provider for airlines in Africa, where Network is enabling digital payments on all Kenya Airways flights. The company also became the payments partner of choice for the Namibian government, enabling digital payments for e-visas and passport applications across the country. The continued strength in Group SME TPV growth of 36% is supported by the pace of new signings which accelerated through the period, supported by Network’s fully digital onboarding process which now features 3D Secure 2.0 as a default for new merchants.
New Outsourced Payment Services customer wins
Network secured three new FIs across its markets, including Vodacom Financial Services, one of Africa’s most renowned MNOs, to provide merchant acquirer processing services in South Africa. Network also renewed an existing contract with Polaris Bank in Africa for a further five years, providing one of Nigeria’s leading retail banks with card hosting, operational and management services. Furthermore, the company’s partnership with Mastercard remains strong, with the commercialisation of many recently agreed services and capabilities, including fraud mitigating services through Brighterion and ‘Click to Pay’.
Enhanced capabilities including new payment acceptance methods and value-added-services
This quarter Network partnered with Ecocash, a Mobile Network Operator in Zimbabwe, to enable even more merchants to accept mobile money payments. The company also became the single point of contact for merchants through its expanding range of value-added services and by providing its merchant customers with additional tools to further grow their businesses.
Cross-sell and new product launches
Network’s fraud monitoring capabilities continued to gain traction this quarter, having signed a new agreement with United Arab Bank for the provision of fraud monitoring solutions, in partnership with FICO, with Arab African International Bank also extending its portfolio to include fraud monitoring.
Network remains the card issuer of choice in its markets, having strengthened its relationship with Access Bank in South Africa to issue virtual cards and launching new pre-paid cards for Blink Neobank.
