By
Vishal Bhidu
Head of Engineering at Peach Payments Ruberto Paulo was recently in Mauritius where we caught up with him and in this lively chat he discusses the huge shift witnessed towards digital transactions, the company’s local plans as well as the underlying market challenges. He also spoke about market specifics, the challenges and opportunities posed by each unique market within Africa and how Peach Payments intends to tap into those opportunities while leveraging the island’s potential across spheres such as finance and ICT.
What motivated Peach Payments to set up in Mauritius in terms of geographic and strategic location to boost business on the continent? How are you getting by the underlying market challenges?
Each country in Africa boasts unique attributes in terms of cultures and challenges which are very specific to the citizens within their borders. In the fintech world, the products offered to try solving problems for the Western world won’t necessarily be a good fit for the same obstacles present here in Africa. As a result, we can see that other global payment facilitators have historically moved into regions where their models meet with resistance because they simply don’t fit into their culture.
Our strategy is to understand how our products can solve each African country’s unique challenges and tap into the amazing potential of the continent. Our main focus is to enhance prudent offerings and understand how each country operates within the digital finance space. The big vision for us is to offer country-specific functionality for our services, from our onboarding process to country-specific payment options we offer in each country – it should all resonate with our customers.
From what I have witnessed here in Mauritius that the adoption of safer modern digital payment methods is slow and many locals still primarily use paper money. By comparison in countries like South Africa and Kenya crime remains a big factor that drives people to make the shift toward digital payment methods.
In addition, we’ve seen a trend towards digital payments among the younger generation aged between 20 and 30, who are unwilling to stand in a queue at banks. This is where we will see a major stride towards the digital space, although it’s happening at a slower rate here as compared to some other countries, in addition to several other factors contributing towards the adoption of digital payments.
Coming from an engineering background, how do you see value additions to Peach Payments and development taking place across the broader spectrum in helping Mauritius offer solutions across Africa?
The rate at which the human race has become dependent on technology, specifically web technology, has been exponential over the last 20 years. That means predicting the scale and usage within the near future has been both exciting and frightening – a company with our ambitions and goals can’t think about the scale of today but rather has to focus on what the market will look like in the next 5-10 years. We have to build systems capable of matching growth from new regions and the scale from within those regions over the next few years.
The challenges that we as a global community went through during the COVID-19 pandemic have resulted in a doubling or tripling of Peach Payments market. That was quite challenging, particularly so with an increased reliance on e-commerce. We certainly saw benefits in exponential growth in Mauritius, even though it was a country where people traditionally bought goods in person and with the help of paper money. People have completely altered their behaviour and are comfortable with buying online now. This rapid change and scale of behaviour are taking place throughout the world.
As the demand for payment options increases, there is a need for us to increase scalability. That’s a pivotal goal of our technology team at Peach Payments, so we make use of leading-edge technology, practices, and processes to enable us to swiftly support the large growth.
Purely speaking about the local market, we have seen double the growth as compared to the previous year within Mauritius where we are also slowly building a development centre within the country so that we can utilize the strong skills across sectors such as finance and telecom. We’re also attracting talent that has worked with a large volume of international message transactions as well as skills that have been put to the test in adjusting to scale.
How do you see Mauritius in terms of being well-equipped to emerge as a development or technology hub regionally from Peach’s Perspective and what is your USP as compared to your competitors?
The island is well equipped with dynamic universities, and strong software developer communities spanning across the local shores and in addition to that, there is a large incubation effort on the part of local and international companies that bodes well for growth in the sector. I have had several conversations with local software engineers, who have raised issues with the incentives big international companies offer after a certain period to relocate senior engineers from the island. They say this has resulted in a brain drain, and that the vast majority of the remaining software engineers are fairly junior and have fewer local mentors to grow their communities, which may be where our local teams can step in to play a role.
The brain drain in itself poses a big challenge. There are various bodies that are looking at, what can be done to support engineers to be anchored and retain them locally. The bottom line is that there is a big growth among new engineers which can be a challenge in itself to grow teams and keep them on the island to enhance the company’s capabilities – which we do by increasing the overall capacity of each individual engineer we employ.
Peach Payments is distinct from its competitors in terms of the range of innovations – which is significantly higher than software engineers are normally exposed to. In terms of technologies, we can handle many more on a higher scale with no need to worry about challenges or competition, and we find our engineers like the specialisation and the challenge.
We are also building our technology, spending a lot of time on innovation, and striving to release our products and enhancements much faster than our competitors coupled with the building of our payment services for Mauritius and in Mauritius because our teams know exactly what’s needed here. Moreover, this development and innovation we are building for Africa as a whole have a direct benefit for Mauritius too. Peach Payments’ robustness, security, risk management, data, and analytics are designed for larger African markets with a substantially high number of transactions per second.
Q: Payment gateway is redefining the way business is conducted as we grapple with market uncertainty such as COVID-19 and the Russia-Ukraine war. How can payments stimulate the growth of fintech spanning the financial landscape both locally and across the globe with Technology playing a massive role?
As a payment gateway, our role is to connect technologies and people in a way they are familiar and comfortable with using those technologies. Each part of the demography experiences this connection in a different way and reason why we have a matrix that makes it possible to offer payment options that work for every age group’s preference and every stratum of society’s preferences. Some of our payment products will resonate with the older generation and others will work better for the upcoming markets that help to push boundaries on what’s already known.
The new generation is more open to exploring and trying out new things. Across Africa or Mauritius, we find new companies that have been founded to address individual markets or capture them. There is room for many companies to succeed, bringing new and interesting products to the continent. As a result of Instant Payment Switch by the Bank of Mauritius, a number of exciting new payment methods have arisen which includes Blink by Emtel, POP, MyTMoney, and others. While debit and credit card payments still dominate e-commerce transactions, the rise of mobile payments is growing where this fact is supported by the monthly statistics released by the Bank of Mauritius indicating that the number of mobile banking and payment transactions grew by roughly 62 percent between December 2022 and December 2021 while the value of transactions grew by roughly 67 percent at the same time.
From a technical standpoint, we deploy technologies in a way that makes payments easy where the aim is to help businesses gain customers by tapping into a large consumer base. We work with many different Enterprise companies, and SMEs in offering products to a specific demographic and helping connect them.
The figures are telling with 400 percent in customer acquisition and 130 percent in revenue growth globally for Peach, during COVID times. What are the factors driving growth and how do you eye market opportunities in Mauritius from both a financial and technological perspective?
There are many factors accounting for market opportunities in Mauritius. Among them are people changing their spending or buying habits, which acts as a huge differentiator. There is also a change in shopping behaviour among the younger generations who are more open to exploring digital options, coupled with the lifestyle changes we’ve seen as a result of the pandemic. One observation made is about the youth having taught the older generation on the need to adjust or adapt by embracing shopping online and they have now experienced the perks of online shopping, such as home delivery rather than going through the hassle of standing in a line to buy products.
From a technological perspective, we have a large number of local and international merchants that, in turn, are all increasing the number of customers who are using their services and by associating with our services. We are a component in their success and in ensuring high transaction success rates and high availability is critical. Many of our merchants are providing critical products like food, medicine and internet connectivity – they need the payments to be successful.
Internally, there are many different components we have to manage, from various integration points to the interfaces from which companies can send us payment requests. We work closely with various alternative payment providers but also with acquirers and various banks, while constantly gathering insights about availability across the whole pipeline. This means we are able to navigate these challenges with merchants who would feel the pinch if payments didn’t go through.
We also have to think about the new technologies that companies are now leveraging to firm up their products. They may adopt e-commerce platforms, build their apps, while we do our part by integrating our software with those apps.
What role can Mauritius play to help emerge as a FinTech hub with Peach Payments contributing significantly to this growth?
Mauritius is going to play an important role in managing transactions and understanding payments for the rest of Africa. The continent has innovated deeply around payments, but the companies and individuals who built those payment options are limited. Therefore, we can leverage Mauritius as a hub for understanding and learning the ropes of global payment systems, to build on its traditional role of a financial hub for Africa.
