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Tag: Interswitch

  • Interswitch boss advises entrepreneurs

    Interswitch boss advises entrepreneurs

    Mitchell Elegbe, founder and group managing director of Nigeria’s Interswitch Limited, a pan-African integrated payment and transaction processing company, has some advice for entrepreneurs that not everyone agrees with. He believes entrepreneurs should consider giving up the ownership of their companies when first starting out.

    “This is a very controversial advice because every time I have mentioned it to entrepreneurs they don’t take it seriously. I don’t know if you are aware, but when I started Interswitch, I did not have a single share in the business … and I gave up 100 per cent ownership,” Elegbe told How we made it in Africa.

    He added that the fact that the founder of a company can be fired by new owners “is something I think a lot of entrepreneurs must strive for”. Why? Because this is one way to ensure objectivity when making important business decisions.

    “The man who runs a business cannot distinguish between the business and his private assets. The line is usually blurred,” explained Elegbe. “So my advice to entrepreneurs is to deliberately put yourself in the position where you can be fired for wrong decisions. Overall, it helps you.”

    This raises questions about the decision many entrepreneurs must make when seeking to fund the expansion of their companies through private equity investment, at the expense of losing control and ownership.

    “What I find with a lot of entrepreneurs today is that they want control. So my question is, why do you need control? I believe that every entrepreneur must be under authority, otherwise you will make the wrong decisions,” continued Elegbe.

    “By putting yourself under the authority of other people who are wiser, who can guide you, and (through), you recognising that you could lose your job if you do not do the right thing, is pressure that every entrepreneur should deliberately seek to put themselves under because in the end you end up becoming a better entrepreneur.”

     

    Interswitch’s success

     

    Interswitch started operations in Nigeria in 2002 and was initially financed with N200million (about US$1.2million) from a number of Nigerian banks, not through a loan but through equity. The second round of capital came through private equity investment. Eight years on, in 2010, Interswitch was valued at N26billion ($163million), according to Elegbe.

    The company has become a leader in providing technology integration, advisory support, transaction processing and payment infrastructure services to governments, banks and various corporate organisations in Nigeria. Three years ago, it expanded into Uganda and last year, Interswitch made a move into The Gambia. Furthermore, Elegbe told How we made it in Africa that they are looking into expanding further into Africa.

    Considering Interswitch’s success, Elegbe still has no regrets about giving up the ownership of his company and, in fact, believes that Interswitch would not be where it is today if he hadn’t.

    Three years after giving up ownership, the chairman of Interswitch rewarded Elegbe with shares for his hard work and contribution to the company’s growth. “To me, (owning) one per cent of a very big and successful organisation is more important than 100 per cent of an organisation that is going nowhere,” he said.

    Elegbe has won a number of business leadership and managerial awards. Most recently, he was awarded the Transformational Business Award by the African Leadership Network at the 2013 Africa Awards for Entrepreneurship. The award is in recognition of a notable business leader who has created significant socio-economic impact in Africa by building a business with revenues greater than $50million.

     

    •Culledfrom www.howwemadeitinafrica.com

     

  • Interswitch creates holding company to drive regional and international growth

    Interswitch creates holding company to drive regional and international growth

    Interswitch, a pan-African integrated payment processing and transaction switching company, has announced the spin-off, of two of its core divisions: Verve International (“Verve”) and Switching and Processing, as separate, autonomous businesses.

    In a statement by the Interswitch, the company said the rationale for separation is driven by the company’s strategy to orchestrate the next stage of sustainable growth through empowering the various line businesses to broaden and deepen their solution and service offerings to better serve their customers across Africa.

    Separation, they stressed, will enable Verve to leverage, to the maximum extent, its recent strategic alliance with the ‘Discover’ network, providing new business opportunities in over 185 countries around the world.

    The change also brings Interswitch’s corporate structure into line with the guidelines of the Payment Systems Vision 2020 of the Central Bank of Nigeria (“CBN”), Verve International and Interswitch Switching and Processing to have separate management teams.

    Verve International is to be led by Mr. Charles Ifedi, while Interswitch Switching and Processing will be managed by Mr. Akeem Lawal.

    Mr. Mitchell Elegbe, Group Managing Director and Chief Executive Officer of Interswitch Transnational Holdings commented: “It has always been our desire to evolve into an integrated payments holding business where the various parts of the business are driven to deepen and broaden their relationships with their various customers by creating innovative products and services of real value. Creating the right governance structure to herald this new phase of sustainable growth has been the focus of the board and management in the last few months. I am elated that we have successfully completed this separation, which took effect from April 1st 2013.”

  • Interswitch rewards shoppers

    There is nothing more exciting to dedicated shoppers than being rewarded for shopping through a loyalty scheme such as Reward Money loyalty programme by Interswitch, which is aimed at giving back to customers every time they go shopping.

    Interswitch, an integrated payment and transaction processing company, through a relationship with several established merchants in the country, has intensified the campaign of its Reward Money loyalty programme with these merchants in a bid to reward Verve cardholders.

    The first in-mall activation took place at the Ikeja Shopping Mall with some of these merchants such as US Polo, Accessories to die for, KFC etc, where a winner was instantly rewarded with N5,000 gift voucher for a purchase at one of the merchant locations.  According to the firm, customers, who make purchase with Verve card are awarded Reward Money for purchases made at merchant locations.

    Director of Switching and Processing at Interswitch, Akeem Lawal, while speaking at the activation of the loyalty programme at merchant locations at Surulere Shopping mall at the weekend, noted that Reward Money is an innovative merchant loyalty scheme, which allows Verve cardholders to get instant rewards while using their cards at merchant locations.

    For the Surulere mall, he said the firm has started a partnership with 12 merchants and hopes to increase the number in a few days, even as it expressed interest to expand the programme to Lekki shopping mall soonest.

    “This is first of its kind loyalty programme in Nigeria, as it allows customers to earn Reward Money based on each merchant’s pre-agreed Reward Money allocation. The Reward Money earned is instantly converted to spendable money on the customer’s card. The receipt obtained from the merchants PoS shows the Reward Money earned and the total Reward Money balance accumulated,” he said.

    He added that the solution has been designed to be “simple to use, simple to earn and simple to redeem” and it is very easy to set up for the merchant. It is very easy for the merchant to use and operate as it is automated and requires minimal human interaction from the merchant and cardholders.

    For instance, the PoS terminal recognises the cardholder and automatically awards the merchant specified Reward Money to the cardholder based on the amount spent. The more money the customer spends at the merchant using a Verve card, the more Reward Money earned.

    The money earned can instantly be spent or “burned” to buy products or services from the merchant or accumulated to be spent later at the same merchant or at any of the other Reward Money enabled locations.

    He said Reward Money is specially designed to foster a better relationship between merchants and their customers. With Reward Money, merchants would be able to reward customers based on the amount they spend and customers will be encouraged to spend more at the merchant’s location using their cards.

    “The Reward Money merchant determines the amount of Reward Money to be given, which can be as much as 20 per cent of total purchase value to the cardholder,” he explained.

  • 60m payment cards active, says Interswitch

    Over 60 million payment card users are active in the country today, the Head, Verve Business Interswitch Mrs. Oluwatobi Bushoro has said.

    Speaking to The Nation during the final draw of its promo in Lagos, Bushoro said the card users are on the Interswitch platform.

    She said Interswitch, banks and the Central Bank of Nigeria (CBN) are working to increase confidence in the card payment system.

    She said: “The issue of growing confidence is not a one-off thing. It is a continuous exercise, which the company and other important stakeholders have committed themselves to. In the past two years, we have been trying to see how we can grow the confidence of payment card users. We do things across board to grow customers’ confidence. For instance, banks use e-mail, Short Message service (SMS), Customers Service units, among other channels to educate customers and sensitise them on frauds.”

    She said virtually all the banks are on the Interswitch platform, which they use to render e-payment services to their customers.

    Bushoro said payment cards have been configured in such a way that they cannot be cloned, stressing that other security measures have put in place to protect customers.

    Meanwhile, six banks have implemented the One Time Passwords (OTP) policy introduced by the CBN to ensure a safer web transaction.

    The Director, Payment Solutions and Value Added Service (VAS), Interswitch, Mr Charles Idedi, listed the banks to include United Bank for Africa (UBA) Plc, Access Bank Plc, Guaranty Trust Bank Plc, First City Merchant Bank Plc, First Bank and Zenith Bank Plc.

    He said the banks have implemented One Time Passwords policy to improve the security of their customers.

    He said Interswitch introduced OTP on its platform to protect customers whenever they are making transactions on the internet with their cards.

    He said the company has compiled with the CBN policy on ensuring a safer and reliable online transactions.

    Mr Idedi said different processes must be followed when customers are making transactions, using One Time Password.

    “When a customer attempts to perform a web transaction above a set limit, say N3,000 for airtime recharge,the customer is prompted for a One-Time-Password. Short Message Service (SMS) containing OTP is sent to the customer’s pre-registered phone number. This number is pre-registered with the bank. The safe token platform supports the use of hardware tokens, software tokens, grid cards and OTP delivered via SMS or e-mail,” he explained.