Three out of 10 payments in Africa fail, according to reports. The factors behind this range from a fragmented payments landscape and invalid cards to dormant accounts and higher dispute rates; emerge each year leading to a $14 billion loss of recurring revenue for digital businesses across the continent.
These problems are set to increase as digital payments in Africa continue to grow, by 20% year-on-year, according to some reports. And while gateways and aggregators have made it easier for businesses to accept multiple payment methods, there are few solutions to aggregate them out of necessity and handle the payment errors that arise from each platform. This is where Revio, a South African API payments and collections company, comes in.
Fintech investor Speedinvest led the round, with the participation of Ralicap Ventures, The Fund and Two Culture Capital. Several angel investors also attended, including payment and revenue recovery experts from Sequoia, Quona Capital and Circle Payments, according to a statement shared by the startup.
Revio was founded by Ruan Botha in 2020. As a professional who has worked in the South African banking and insurance industry for over a decade, Botha decided to launch Revio after seeing how much time and manual effort businesses spend engaging customers with pending and failed payments. It was clear that very few companies had invested significantly in revenue recovery. When over 25 customers were asked where they would invest $1 if they needed to fix their payment systems, most of them said they would spend at least 90% of that money dealing with payment errors and the rate of customer abandonment.
“We have Debit Order as the largest recurring payment method in South Africa. But as companies want to start adding other different payment methods to meet customer demand, it has been very difficult for them to do that,” Botha told TechCrunch in an interview. of the disconnect between banks, new fintechs and payment aggregators which has also made it difficult for businesses to collect recurring revenue on an ongoing basis.So, with Revio, we wanted to make it super simple for businesses to connect as many payment methods as they need, not only in South Africa, but also in the rest of Africa and globally”.
Botha is supported by three executives who manage the company’s affairs: Chief commercial officer Pieter Grobbelaar, a former Flutterwave national leader; chief technical manager Kyle Tito, who has experience working with fintechs and a venture capital firm; product manager Stefan Grieselwho has over 8 years experience in fintech product; and chief operating officer Nicole Duna venture builder and trader who has worked with several African startups.
Dunn, on a call with Botha with TechCrunch, said that Revio aggregates and orchestrates different payment methods in Africa, including card, wire transfer, debit order, mobile money, vouchers and QR code. The platform collects and settles payments in over 40 marketplaces through payment service providers such as Flutterwave, Paystack, Ozow and Stitch. Some of its features, in addition to multiple payment methods, include intelligent payment routing, automated billing processes, automatic collections, and real-time analytics and reporting.
In over a year of business, Revio has welcomed over 50 customers and processes thousands of transactions monthly. They range from large enterprises to mid-sized and fast-growing scale-up companies that are involved in businesses with recurring revenue and high transaction volumes, typically needing multiple payment methods in multiple markets. These are often insurers, telecommunications companies, retailers, subscription software or media, asset leasing or financing businesses, and alternative lenders.
“We’ve also built orchestration capabilities where we can reduce payment errors through things like intelligent transaction routing, smart retries to make sure a customer doesn’t go into arrears, especially on recurring payments,” Dunn said. “And then where we differ is that we serve recurring revenue businesses instead of the typical e-commerce platforms.” He adds that Revio has over 100 clients in the works waiting to be added.
Payment orchestration is becoming increasingly important in today’s world where businesses operate in multiple countries and need a variety of payment methods to get by. While a handful of such platforms existed in the US and Europe to handle this heavy lifting via unified payments APIs like Primer, Spreedly and Zooz, companies in developing markets are starting to see identical platforms like Revio and MoneyHash based in Egypt take center stage in various regions.
On the subject of competition and how it stands out, Revio claims to be the first African payments platform focused on payment failures and revenue recovery. “We also have more functionality and coverage in the sub-Saharan, sub-Saharan African context than other platforms on the market,” added Dunn. Either way, the global payment orchestration market is, according to reports, growing at a rapid rate (according to one study, the market size is projected to reach $6.52 billion by 2030, advancing at a CAGR of 24, 5% from 2022 to 2030) and there’s more than enough room for newer platforms to capture market share and incumbents like Revio to expand their reach.
It’s one reason the two-year-old fintech has raised this capital: to enter new markets in and outside Africa, expand its team in the process, and launch new products for its growing clientele.
“I would say the investment on use is twofold,” Botha said. “One is to gain access to more strategic machine learning and data expertise to help us grow and drive better engagement with customers, understand why they fail, and how to achieve a better response rate. With the resulting data, we can begin our experimentation in some of the major markets in Africa. We want to operate in around 13 African countries over the next 18 months, but focusing on three or four major markets. And then, get enough traction that we can enter other emerging markets like Latin America.”
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