Sureswipe

SURESWIPE

SURESWIPE

Quality Service Delivery Sets Sureswipe Apart PRODUCTION: David Napier

Helping independent retailers and other clients to accept payments for their goods and services but doing so with a touch of quality and excellent service delivery has resulted in Sureswipe becoming known as the industry leader in South Africa’s payment service industry. MD Paul Kent talks to Enterprise Africa about the company’s ongoing success and his plans for the future.

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The way people pay for the products and services they consume is in a constant state of shift. Before we get settled with whatever the latest trend is, payment systems will likely change again – it’s just the nature of technology, forever adapting. Today, the two most prominent payment methods globally are cash and card. Bartering is almost gone, cheques have become extinct, coins are bulky and inconvenient, and paper cash is unsafe and inconvenient to carry. This, along with the rise of online shopping, has fuelled the growth of card payments and digital money transfer. So, what happens when customers want to use their cards?

Banks are issuing are issuing new cards all the time, but retailers are finding it

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difficult and expensive to accept plastic?

Whether it’s contactless or chip and pin, South Africa’s Sureswipe has the answer.

Founded in 2008 in Johannesburg, Sureswipe has grown steadily over the past 11 years and is now the industry leader in a highly competitive market. The company offers traditional standalone card machine; Integrated payments for larger retail franchise stores looking for faster transactions to reduce queues; mobile MOVE card machines for businesses on the go with a POS LITE APP based point of sale software for start-ups and smaller retailers; Gift and Loyalty card programmes for business owners looking to retain, attract customers and grow their business, and much more.

Managing Director, Paul Kent tells Enterprise Africa about the idea behind Sureswipe.

“We have around 55 million people in the country and there’s over 70 million bank cards in circulation,” he says. “We have good distribution on the issuance of cards but what we don’t have is good distribution of card acceptance points.

We want to make card acceptance easy and accessible to retailers across the country. That means we have to bring options to merchants and retailers of all size. Even to get a traditional standalone or portable card machine, it is still quite expensive for a smaller retailer.

We have introduced a mobile card machine solution to the market which, from a monthly fixed cost perspective,

INDUSTRY FOCUS: TECHNOLOGY

// ONLY 2-3% OF TOTAL RETAIL SALES ARE THROUGH E-COMMERCE SITES AND THAT IS SUCH A SMALL PORTION THAT WE ARE STILL WAITING TO SEE A STRONG SHIFT IN CONSUMER PATTERNS // is roughly about 20% of the cost of a standalone device. These improvements will propel us into an environment where more people can accept card payments.

The estimates however still suggest that just two or three out of ten retailers in South Africa have a card reader in their store and eight out of ten transactions are still cash so there is a lot of scope for growth in South Africa.”

In the UK in 2017 – a market where card transactions are the leading type of payment – more than £900 billion is moved through cards - more than a third of the country’s GDP. Chip and pin, contactless and remote payments are all popular, and mobile and wearable tech device payments are now starting to gain traction as consumers look for easy, fast and convenient payment options.

In South Africa, around ZAR 140 billion now travels through digital payment channels, and that volume is forecasted to increase by more than 16% up until 2021.

For Paul Kent, the opportunities in this ever-changing landscape remain attractive. He is confident that the key to unlocking further market share is service delivery. The products are based on technology which is already widespread in other international markets and they have been developed to very high standards. Focus on quality service is what helped the company to start, and Kent says that is what will differentiate Sureswipe in the future.

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FIVE YEAR STRATEGY “When we started out more than 10 years ago, the average waiting time for an independent retailer to get up and running took about 30 days before a bank would send someone out. It took another couple of weeks before you would get your card machine installed and if the card machine stopped working, it would take another week to get a technician out – all of this with very high fees,” he remembers. “Since then, the banks have caught up with our offering, but we’ve upped our game since then too. We came in saying we could get customers set-up within seven days and we would send technicians out to fix machines within two days – that was our commitment upfront. We are now getting card machines installed in just two days and our service levels are same day or next day at worst. We asked ourselves ‘if we started the business today with all the knowledge we have now, what would we do differently’ - We are looking at fundamentally changing our operational model at the heart of what we do. We are looking at how we scale the business but still provide the right level of service consistently to the target market that we have identified.”

Fostering strong relationships with customers based on quality service is the key for growth in all service-based industries. Where South Africa’s banks had failed to meet the service requirements of the small retailer, Sureswipe was bringing refreshing focus with excellent service and affordable rate for clients. Actively choosing to concentrate on independent retailers rather than major retail chains, Kent and Sureswipe had found the perfect recipe for success.

“Most transactions in the country are still cash-based, card is moving but cash is still preferred. 10 years ago, there were four major banks and they had an

oligopoly. Barriers to entry were very high and in that environment, with big complacent corporates, they get lazy. That is when the opportunity for competition comes through and we have seen that with the growth of Capitec Bank. I still think there is an opportunity for us to take more market share,” he says.

The use of digital tools will help with Sureswipe’s growth in the same way it has helped the entire card industry to thrive.

The banking sector landscape has shifted to a heavy digital focus and is becoming increasingly popular with many new banks now emerging around the world, with no physical branches and all client interaction and service managed through apps, websites and over the phone. First Direct and Monzo in the UK, GoBank and BankMobile in the USA, Xinja in Australia and many more are new types of bank that are completely app based, 100% mobile, but still issue cards for secure transacting. In South Africa, TymeBank has received attention for becoming the country’s first fully digital bank.

Kent sees the opportunities that stem from the digital approach when it is combined with quality service delivery.

“We take great learnings from the likes of TymeBank with our sign-up process. I believe, if we have the correct documentation, we could get someone up and running with a card machine in 30-60 minutes. We have a network of sales people on the ground and that is where the majority of our sales come from, so if we have people on the ground deploying devices in 30-60 minutes, that will be a real achievement.”

He identifies new start-up businesses as those which could benefit from an efficient digital sign-up process.

“I think newer businesses are looking to do more online sign-up, so we need to work on that. There’s a lot of growth potential there, particularly

// WE STARTED OUT OF ANOTHER COMPANY SO IT WAS MORE INTRAPRENEURSHIP NOT ENTREPRENEURSHIP //

SURESWIPE

with businesses that are opening up for the first time. For the more established businesses in physical stores or in the mall, personal selling is still the best way to target them. There is a lot of growth in our wider distribution network across more regions in South Africa.”

PROUDLY SOUTH AFRICAN Sureswipe has achieved double-digit year-on-year growth and continues to innovate its model to best serve its clients. This is proof that quality of service and competitive pricing is everything in this industry considering that none of the tech is novel. Key in understanding the level of quality needed for the market comes from Sureswipe’s team – people who understand the South African retail environment. With 140 people working countrywide to onboard and service as many clients as possible, Sureswipe remains a growing South African fintech company.

“We have decentralised decision making and that is the reason we have

onboarded experienced people from other markets – we want to distribute decision making and constantly learn.

We like to promote and develop from within and we are looking at developing management so that we can disperse decision making and operate business units separately. That mentality gets people looking at the right things and making the right decisions,” explains Kent, who founded the business in 2008 and has been actively involved every day since.

The idea for the company’s model came about when the South African medical insurance sector experienced changes in the medical benefits. “At the time, I was working at Healthbridge, (an electronic switch between medical practitioners and insurers), we realised that with the industry changing to copayments or reduced medical benefits, the way health professionals were collecting money was changing and that existing technology could help,” says Kent.

“Doctors, who had been so used to just sending claims to a medical insurer,

now had to start requesting money from their patients and they were looking for alternative payment mechanisms. Card transactions were the obvious solution and that was at the same time that Capitec Bank was getting into merchant acquiring and looking for a distribution partner. Timing in business is everything and we got the timing right. There was a need in the market for a customer that Healthbridge already had, and there was a bank that could help with distribution around merchant acquiring,” he adds.

“We started off operating out of another company so it was more intrapreneurship not entrepreneurship.”

After starting out as a product within Healthbridge, it became clear to Kent and the rest of the team that this product could work, not just for doctors, but also for independent retailers across the country.

“There were two key things that retailers were struggling with,” details Kent, “service from the banks – the primary providers at the time – was exceptionally poor, and fees were high. Poor service

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INDUSTRY FOCUS: TECHNOLOGY

and high fees is the perfect recipe for disruption. We started the business with a small sales team and had about 200 customers, a few transactions, and we outsourced most of the business operations. We outsourced the call-centre and the technicians, but we quickly started looking at the focus areas that we needed to be competitive in our chosen target markets. It was about access to service and access to product for retailers. We quickly started bringing the service element, that we had historically outsourced, back in-house.”

And, over the last decade, the recipe has been perfected. “We now have more than 8,500 customers and 10,000 point of sale devices in the market,” enthuses Kent. In that time, the business has been named as a National Business Awards finalist, a Deloitte Top 10 company to

work for, a preferred supplier by the Restaurant Association of South Africa, Paul Kent has been named as the NSBC National Entrepreneur Champion, and the company has concluded a number of successful acquisitions.

STAYING RELEVANT In 2016, Sureswipe acquired fintech business Concorde Solutions to provide merchants with a more streamlined process and make the payment method far simpler for consumers by allowing integration between the card payment device and the point-of-sale software. In 2018, Sureswipe acquired a majority stake in point of sale software company Humble Till. Both acquisitions are driven by the desire to deliver quality service for clients and a seamless experience for end-users, becoming not just a payments provider

but a solutions provider.

This growth has been key in keeping the business at the sharp end of the market. “We work in a very competitive environment and when we started 10 years ago there were only the banks and one other non-bank player, but today there are so many. They open and close all the time as it is a very competitive market. Sureswipe is well-positioned to consolidate the market and create growth through acquisition,” says Kent.

As for development of new technologies and preparation for the next generation of retail outlet, Kent remains confident that Sureswipe has the product portfolio to remain relevant and will be able to adapt as and when new concepts arrive in South Africa.

“With unattended check outs and Amazon Go-type stores, there are

ACS - Proud Product Partner with Sureswipe In a world where at least 40% of CEOs globally consider information security one of the greatest risks to business, ACS a division of Altron was the first company in South Africa to offer retailers a PCI-validated Point-to-Point Encryption (P2PE) solution to protect consumer card data at point-of-sale.

“When searching for a payment solution, the most important factor is the level of security ensuring that sensitive data is not compromised. While criminals are becoming more experienced and ‘find new ways of stealing personal and financial data, it is crucial to have a payment security plan for your business, regardless of the industry or size” says Charl Van Rensburg, Manager for Integrated Transactions at ACS. As with any good sunny day, there’s a dark cloud bound to ruin it. As your customers transact both online and offline daily, there is a chance for criminals to gain exposure, which is why it is becoming more crucial for businesses to protect customers data, ensuring peace of mind. Businesses are now required to have the necessary organisational and technical processes ready to prevent confidential information from being compromised, or they could face hefty financial penalties.

That is why the Payment Card Industry Data Security Standard (PCI DSS) has been implemented to ensure policies and procedures are intended to optimize the security of card transactions and protect cardholders against the misuse of their personal information.

ACS provides its customers like Sureswipe with increasingly-enhanced security at a time where we can see more consumers bank accounts being emptied through fraud. “We want to ensure that we are able to accept any valid payment token presented to a terminal and switch that token securely to the relevant acquiring partner” says Van Rensburg.

He adds “We value our relationship with Sureswipe as their trusted partner for their customers transactions. We understand the importance of providing Sureswipe’s customers with ease, convenience and safety as they transact.”

Protecting the privacy and security of customer’s data has never been more important. Implementing the right procedures and staying ahead of malicious entities that could compromise your business allows you to mitigate the risks in time as well as protect your brand reputation and promise to your customers

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A DIVISION OF ALTRON

INDUSTRY FOCUS: TECHNOLOGY

lots of different payment options that are becoming available,” says Kent.

“The first thing that will change is the different customer experience at the point of interaction. If you think about making a card payment in a Quick Service Restaurant or boutique store or high-street chain, the experience is the same in every store. Now, there are many more options available – QR codes are popular, contactless is more popular with low value items, mobile point-of-sale

devices are being used as queue busters; all of these payment options change the experience. However, we have a very long way to go before we start seeing widespread tech like that in South Africa.”

Could the company look beyond SA’s borders for further growth opportunity?

According to Kent, that has long been an ambition. When interviewed in 2016, Kent said that Sureswipe should be present across southern Africa by the end of 2018.

To date, the company has only had small

// I BELIEVE, IF WE HAVE THE CORRECT DOCUMENTATION, WE COULD GET SOMEONE UP AND RUNNING WITH A CARD MACHINE IN 30-60 MINUTES //

MD Paul Kent - Image © Devin Lester

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success across border through its Humble Software partnership, and the reason for the slow progress is the rate of card issuance by banks.

“We have a philosophy around focussing on the right things and we believe there is a lot of opportunity still here,” he says. “We can do a lot more learning in South Africa before we look elsewhere. There’s a lot of regulatory requirements which differ in most countries. It’s not as easy as just picking up our model and just moving it to another country. More than that, we want to follow the card issuing. We have to consider whether there are enough cards being issued to make electronic payments and card transactions viable at the point of retail. The number of cards in circulation across Africa is still relatively small and until that increases, I’m not sure we want to go and be the bleeding edge in other developing markets.”

BOOMING IN TOUGH TIMES The success that Sureswipe has managed to achieve through its life is a perfect example to follow for companies aiming for the top of their sector. In the 11 years that Sureswipe has been operational, there has been a number of serious recessions in the country, and the 2008 global financial crisis provided little stability for the company in its early years.

“The independents are at the cutting edge of that. They are the first to feel any pinch in the economy and the last to feel any upswing. We really see the sharp end of these slowdowns,” admits Kent.

“What we’ve seen over the last couple of years is many companies closing their doors, much more than in previous years.

Businesses are not even surviving and that is very worrying. The economy is not growing and prices are going up on muchneeded services such as electricity and fuel.

VAT has increased and this has impacted on the ability of people to spend - we see that more and more,” he adds.

In 2018, South Africa’s growth was just 0.8% and figures are not expected to gain much momentum through 2019. However, the ever-optimistic

SURESWIPE

// IT’S NOT AS EASY AS JUST PICKING UP OUR MODEL AND JUST MOVING IT TO ANOTHER COUNTRY // Kent is hopeful.

“I believe the tough times will soon be behind us and I think we are looking towards an uptick in the economy. All the businesses that survive through the slow times are usually those that go lean and invest in running a tight ship. Having been lean and running a diligent operating model usually lets companies thrive when there is an upswing, so I am very positive about our own business and also about our customers.”

With the growth of internet penetration, roll out of strong Wi-Fi, ongoing growth of the number of banked individuals, smartphone uptake, continued focus on ‘going

digital’ in business, there will undoubtedly be opportunities for further growth at Sureswipe.

“The online ecommerce market in South Africa still needs to mature. It has had good growth over the past few years and sales like Black Friday drove people online, but those kind of deals are also in stores. Only 2-3% of total retail sales are through e-commerce sites and that is such a small portion that we are still waiting to see a strong shift in consumer patterns.

“Contactless has not taken off in a big way here yet as a lot of the acquirers, including us, have not done a good job of promoting it in store. Many small value transactions are still cash as its easy, but as contactless grows, it is going to become a lot easier and safer to use cards instead of cash.”

For this award-winning entrepreneur and highly accoladed company, success has been sweet but there remains a lot more to be done.

An unrelenting and unerring drive for

quality service delivery sets Sureswipe apart, and that focus is something which will not change anytime soon.

“Personally, I believe we are still at the start of our journey. I am still very much involved with the business and we have built a great team. In the early days I was very lucky to have a very good COO who ensured the sales operation was like a well-oiled machine.

We have had some great people on the service and technology side, and I think we can do so much more in South Africa, increasing our market share to SMME’s and independent retailers before expanding across our borders,” he concludes.

WWW.SURESWIPE.CO.ZA

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