Naspers talks Turkey in digital payments space


Naspers talks Turkey in digital payments space

Published Date: 2019-06-13 | Source: Stephen Gunnion | Author: Stephen Gunnion

Naspers talks Turkey in digital payments space

The consumer internet group believes there's a big opportunity for PayU in Turkey as the government promotes digitisation of the economy.

Naspers has strengthened its position in the Turkish market for digital payments as it aims to become the leading payments provider in high growth markets. Its fintech and electronic payments subsidiary, PayU, has bought Turkish digital payments provider iyzico. According to Bloomberg, the $165 million (R2.4 billion) acquisition is Naspers's biggest takeover in digital payments yet.

The Istanbul-based company provides secure payments to over 300 marketplace merchants, with over 400,000 sub sellers. About 30,000 online merchants use its checkout solution and brands including Amazon, Nike, H&M and Zara partner with it in Turkey. Naspers says the deal adds to the over $500 million PayU has deployed across fintech investments and M&A.

Even though e-commerce has shown annual growth of over 10% in Turkey, Naspers said only 5% of small and medium-sized businesses (SMBs) have an online presence. It expects that percentage to increase due to government programmes that favour digitisation, creating a big opportunity for e-commerce marketplaces and payment processors.

Petri Redelinghuys from Herenya Capital Advisers said the deal fitted with Naspers's vision of becoming a truly global force in the tech space by making acquisitions aimed at getting exposure to fintech in emerging and largely unpenetrated markets.

The deal comes as Naspers prepares for next month's listing of its global consumer internet assets on Amsterdam's Euronext market under a new holding company. NewCo will include all its internet businesses outside of SA, including its investments in online classifieds, payments and fintech, food delivery, e-tail, travel and education, amongst others. PayU is among the businesses that will be owned by the new holding company.

Separately, Naspers said in a trading statement that core headline earnings per share (EPS) for the year to end-March would be between 31% and 33% higher than in 2018. Earnings per share will decline by 39% to 40% due to the sale a year earlier of a 2% interest in Tencent, which resulted in a once-off gain of $9.1 billion.

Core headline EPS from continuing operations, which exclude video entertainment business MultiChoice following its unbundling earlier this year, will be 24% to 26% higher, while EPS will be down by 62% to 63%.

Its results are scheduled for release on 21 June. Its shares closed 1.1% lower at R3,461.47 yesterday. The trading statement was released after the close of trade.

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