Operational overview - International distribution
The strategy of the International Distribution segment is to pursue growth opportunities for Group products and services across its global footprint, by systematically rolling out points of presence, in a replication of the proven South African business model. As at the end of March 2015 the Group disposed of its non-controlling interest in Smart Voucher Limited, trading as Ukash.
Blue Label Mexico
The business in Mexico encapsulates a number of agreements with key participants in the sales and distribution channels, including the major network operators and the world’s largest bakery, Grupo Bimbo, a joint 46.64% shareholder with Blue Label in BLM.
In September 2014 BLM implemented a strategic decision to become a multi-carrier for all networks. This initiative was costly to BLM in that the dominant network immediately reduced BLM's commission. As a result thereof, it took nine months to regain lost ground incurred, duringwhich both terminal activity and commissions earned from other carriers increased.
The project to expand the distribution network across Mexico progresses steadily with some 62 000 terminals active at present. BLM continues to redeploy underperforming devices and to retrofit mature devices to include financial services transaction capabilities.
Products and services on offer through BLM’s technology platform continue to expand. The range now includes PINless recharge, bill payments, cash collections, card acquiring through Banamex and Visa and digital food vouchers through all five major distributors. Distribution of SIM cards through most of the major networks and an international money transfer service are currently being piloted.
Blue Label’s share of losses for the year amounted to R89 million (2014: R60.8 million loss), consistent with continued margin compression and an increase in overhead costs.
Oxigen Services India
As Oxigen reaches out to India’s unbanked and underbanked population in bringing them into the financial services’ mainstream, it is evolving into a two-part business of product distribution and financial services.
The business continues to expand a valuable distribution network inclusive of “cash in” and “cash out” capabilities. Oxigen now underpins approximately 50 million real-time transactions per month by reaching several million customers across its 200 000 strong merchant base, principally through kiosk, POS and e-wallet banking.
Growth is supported by its increasing number of strategic partnerships with banks. Oxigen now provides direct connectivity to over 100 major banks on the national switch of the NPCI, including the State Bank of India and Ratnaker Bank Limited for business correspondent or kiosk banking. A further growth driver is the rapid adoption of mobile wallets in the country. Over 150 million customers have access to Oxigen’s products and services.
By July 2015, Oxygen reached milestones in having registered 5 million transacting mobile wallets. It continues with its shift in strategy to focus on money transfer services with the value of deposits averaging USD3.3 million per day.
While Oxygen has not been successful in being allocated a banking license as yet, current operations will generate and element of "cashing-out" and debit card transaction fees through its strategic alliance with RBL Bank.
Blue Label’s share of profit for the year equated to R2.6 million (2014: R3.3 million loss).
