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BLUE LABEL INTEGRATED ANNUAL REPORT 2016
Operational overview
continued
Blue Label Mexico (BLM)
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 47.56% shareholder with Blue
Label in BLM.
The project to expand the distribution
network across Mexico progresses
steadily with some 75 000 terminals
now installed. BLM’s strategy is to
redeploy underperforming devices,
while enhancing terminal activity by
driving additional product and service
transactions through its
Red Qiubo
terminal base.
The range of products and services
on offer through BLM’s technology
platform includes PINless recharge,
bill payments, cash collections, card
payments acceptance with
Citibanamex as the acquirer and Visa
as a strategic partner, as well as digital
food vouchers. During the year the
uptake of SIM cards, which generate
monthly compounded annuity
income, gained momentum.
Blue Label’s share of losses for the
year continued to narrow, amounting
to R63 million (2015: R89 million
loss), consistent with judicious
management of overhead costs,
increasing revenue and the
improvement of gross profit margins.
The latter was attributable to BLM
becoming a multi-carrier distributor
for all networks.
Oxigen Services India
India’s fintech economy continues to
expand rapidly, as it embraces the
country’s financial inclusion
imperatives. In turn, Oxigen is
evolving into a two-part business, of
product distribution in the offline
environment and payment solutions
and financial services to online mobile
internet customers.
Since inception, Oxigen’s focus has
been on expanding its offline network
of retail outlets, currently underpinned
by approximately 200 000 POPs. Main
products include mobile top-ups, data
card recharge, satellite TV recharge,
bill payments, correspondence
banking and domestic remittances.
During the year, the Reserve Bank of
India awarded Oxigen a licence to
connect to a centralised bill payments
and settlement system (the Bharat Bill
Payments System), enabling it to
access large numbers of pan-India
billers, for payments in categories
such as utilities, telephones, insurance
and taxes. Recently, Oxigen launched
the Aadhaar Enabled Payment System
at micro-ATM terminals, enabling
customers to remotely cash-in/out on
cardless transactions by utilising their
Aadhaar ID numbers as
authentication. In furthering
convenience for customers, Oxigen
has connected to Immediate Payment
Service (IMPS) of NPCI, an instant
24/7 interbank electronic funds
transfer service.
In aligning with the dynamic
expansion of India’s fintech economy,
a strategic decision was made to enter
the online wallet market. Although
offline retail-based wallets continue to
increase, acquiring additional wallet
subscribers through online channels
has the potential of compounding
transactional revenue. These wallets
also have an intrinsic value based on
worldwide trends. At financial
year-end, Oxigen Wallet supported
23 million subscribers, an increase
of 18 million from the prior year. In
order to attract and retain wallet
subscribers, in both offline and online
ecosystems, significant
developmental, marketing and
advertising spend is required.
Recently, the virtual Visa card was
launched, enabling wallet users, who
do not have a debit or credit card,
to transact by creating their own
multi-or-one time Visa card. The
interoperability of a large number of
virtual prepaid Visa cards on the
Oxigen platform opens up the online
merchant websites in accepting the
Oxigen Wallet.
As at July 2016, Oxigen transacted
approximately USD4 million per day
in money transfers, up from
USD3.3 million per day in the prior
year. Transfers, in turn, are conduits
for remittances. The market potential
for both domestic and international
remittances is estimated at over
USD100 billion, with 7% growth
compounded annually. Currently,
India is the top remittance receiving
country in the world at USD70 billion,
ahead of China, the Philippines,
France and Mexico.*
Blue Label’s share of losses for the
year equated to R28 million (2015:
R2.6 million profit).
Source: *World Bank
International segment
The strategy of the International Distribution 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.
Oxigen now reaches 200 000 merchants, supports 25 million wallets, touches 150 million unique customers,
underpins over 600 million transactions per annum in off- and online environments, and has processed over 2.5 billion
transactions.