Shaking up fossils
The Margin, 18 Sep 2019.
Fuel industry disruptor Payment24 is causing ripples across Africa.
Only five years since its launch to fill a gap in the fleet fuel payment space, Payment24 is now operating across the African continent and has become the driving force behind millions of next-generation fuel transactions each month. It has also sparked a change in the fuel payment sector, with older and more established competitors moving to launch products with similar features. But Payment24 sees this emerging competition as a compliment, and intends to stay at least five years ahead of the industry in terms of R&D and innovation.
“This industry has been a dinosaur,” says co-CEO Shadab Rahil, citing outdated fuel payment and fleet fuel management solutions that remained virtually unchanged for decades. “But we entered the market with technology that was years ahead of anything else, and we have a strategy and roadmap to maintain that lead.”
Co-CEO Nolan Daniel says R&D remains the company’s primary focus, with a fast-growing developer team headed by Rahil and Daniel, the original disruptors. “We have an agile, startup mentality that gives us the edge, and we intend to maintain that culture no matter how big we get,” he says.
Payment24’s ground-breaking B2B and B2C fuel management and payment solutions and mobile apps are designed to streamline and reduce risk in payments for fuel retailers, fleet operators and motorists. The solutions have been rolled out by blue chip retailers and petroleum companies, as well as major logistics players and financial institutions.
A partnership launched this year with BP and the Pick n Pay Smart Shopper loyalty card now sees Payment24 technologies underpinning fuel transactions for the loyalty programme’s seven million-strong cardholder base. In just six months, this has become the biggest fuel loyalty programme in South Africa, giving Smart Shoppers loyalty points when they refuel at BP fuel stations.
BP and Masana Petroleum Solutions have also gone live with their new FleetMove Plus and FleetMove Premium fleet management solutions built on the Payment24 platform to automatically identify vehicles and drivers in order to authorise refuelling and manage fuel expenditure.
The company was selected as one of 36 to participate in the international 500 Startups Global Seed Accelerator programme in San Francisco in 2017, paving the way for an entry into the US. However, while the company had planned to expand into North America this year, Payment24’s growth across Africa has been so strong in recent months that the company has had to delay its US launch plans.
The company had been cautious about expansion for the sake of it, particularly into African regions where red tape and long travelling times could complicate projects run out of Cape Town.
“But a lot more has started happening in the African market, so we are looking at relevant projects in up to 13 African countries and three in the Middle East,” says Rahil. “We had planned to expand into the US this year, but we will likely shift that expansion to next year. We are excited about the potential opportunities in that market.”
Payment24 is actively expanding across Namibia, Kenya, Ghana, Botswana, Nigeria and Mozambique, aiming to be one of the top three players in the pan-African fuel payment space within the next few years.
With a fast-growing team based in Cape Town, Payment24 now fields a workforce of over 30 developers, support and admin staff, but the company expects to grow this number to 50 by the end of the year. All development and most of its sales and support are done from the Cape Town office, with a handful of selected partners in Africa and the Middle East.
“Because ours is a niche enterprise product, we have to be very selective about the channel partners we work with,” says Rahil.
“Our partners would need to have a good understanding of the industry and be established and reputable players,” Daniel notes. “Smaller partners that don’t understand the sector or don’t implement the solutions correctly could cause a project to fail and hurt your brand. So we have found that being selective works better for us at this stage. However, we do have some sales, support and implementation partners in Kenya, Ghana, Namibia and the Middle East, and we’ve also recently signed a global partnership on complementary services.”
As technologists and developers themselves, Rahil and Daniel have been pushing the boundaries of innovation for years, and are keenly exploring the potential applications of technologies such as artificial intelligence in the sector. “It takes long hours and a lot of R&D to stay ahead and keep that edge,” says Daniel. But the company intends to continue investing heavily in innovation.
And while its growth to date may seem impressive, Rahil and Daniel say business growth is never quite enough. “In this sector, the sales cycles are long – anywhere from six months to two years, and the implementation cycles can be between two months and a year, so it takes time to generate revenues. But our growth has been solid and we see a lot of opportunity across Africa in particular,” says Rahil.