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BLUE LABEL
INTEGRATED ANNUAL REPORT 2017
77
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Blue Label Mexico (BLM)
BLM continues to deliver its growth
strategy of building market share by
expanding its POS network and
distributing incremental products and
services through its technology
platform.
Currently, some 81 000 terminals are
deployed. Initiatives to drive additional
product and service transactions
through the Red Qiubo terminal base
include utilising data analytics.
The range of products and services
includes “PINless” airtime recharge,
SIM card distribution and bill
payments. Financial services, such as
cash collections and card acceptance
and acquiring, are offered with
CitiBanamex as the acquirer and Visa
as a strategic partner. Digital food
vouchers are delivered on behalf of
the major food distributors, namely
Edenred, Si Vale, Sodexo and Inbursa.
Blue Label’s share of losses continue to
narrow and amounted to R37 million
(2016: R63 million loss).
Oxigen Services India
The government’s demonetisation of
high denomination notes in November
2016, intended to transition India’s
cash economy in favour of digitisation,
resulted in the dynamics of the fintech
sector changing significantly.
Initially the floodgates for the creation of
e-wallets were opened. Subsequently,
the introduction of new legislation and
technologies has required fintech
businesses to adapt and modify their
strategies.
Since inception, Oxigen focused on
expanding its offline network of
retail outlets, currently reaching
approximately 200 000 merchants. In
support of government’s call to industry
for deploying up to 20 million terminals
over the next few years, Oxigen has
embarked on rolling out its own
micro-ATM POS to access “the last
mile”.
Each micro-ATM is equipped with a
biometric scanner allowing customers
to transact by using their Aadhaar ID
number as authentication. Micro-ATMs
are connected to the National Payments
Corporation of India (NPCI), which
facilitates cash deposit and withdrawal
transactions. Oxigen’s platform already
enables it to perform the functions of a
bank by delivering the convenience of
comprehensive payment solutions
through connectivity to NPCI’s Bill
Payments and Settlement System
(Bharat) and IMPS (Immediate Payments
Service), an instant 24/7 interbank
electronic funds transfer service.
Oxigen’s main offline products include
mobile airtime top-ups, data card
recharge, satellite TV recharge, bill
payments, correspondence banking
and domestic remittances.
Whilst Oxigen entered the online wallet
market some years ago, the effects of
demonetisation continue to evolutionise
and disrupt the e-wallet industry. For
example, government’s Unified
Payments Interface (UPI) app allows
merchants and consumers to pay and
receive money in an instant transfer
between any two bank accounts, a
facility that is not afforded to other
apps.
As a result, Oxigen is now focused
on its core business of rolling out its
footprint in the offline environment,
whilst its e-wallet strategy follows a
B2B2C approach of acquiring
subscribers through white labelling
its platform. Consequently, the online
business and its high cost base is
being scaled back significantly.
Blue Label’s holding in Oxigen is held as
a venture capital investment. The fair
value gain of R160 million and the
Group’s share of losses to 30 November
2016 of R125 million equated to a net
contribution of R35 million to core
headline earnings.
The strategy of the International segment is to pursue growth
opportunities for Group and third-party products and services
across its global footprint, by systematically rolling out points of
presence, in a replication of the proven South African business
model. International operations comprise Blue Label Mexico and
Oxigen Services India.
International segment