Pan-African payment service provider and Kenya-based DPO Group has acquired South African payment processor PayFast for an undisclosed sum.

The deal by the Nairobi-headquartered DPO Group was backed by Apis Partners and executed through a mix of shares and cash, with the PayFast management team remaining key shareholders in DPO Group.

Management representing both companies would not divulge the value of the deal, but described it as "the biggest deal of its kind in Africa, to date", eclipsing its R100-million acquisition of PayGate in 2016.

Management said in total it has deployed US$25-million in facilitating the growth of DPO and this would be one component of that.

"PayFast is a natural fit for DPO Group and this deal strategically follows our acquisitions of PayGate, VCS, Paythru and SiD since 2016," commented Offer Gat, Chairman and co-founder of DPO Group.

"This deal, which we believe is the largest acquisition by a PSP in Africa, reinforces our position as a leading PSP on the continent and is an important step forward in our strategic growth across Africa. The combination of DPO Group and PayFast will greatly increase the ability of merchants on our platform to do business with their clients both within and outside of Africa. Finally, it will allow DPO to continue to improve merchant services, allowing more merchants to transact more broadly at lower cost."

Following the transaction, DPO Group will be providing services to over 100,000 merchants across 18 African markets.

PayFast, founded in 2007, uses a facilitator model to process payments and serves as a single point of contact for its clients.

It is said to have 55,000 merchant partners in South Africa and a network of 80 shopping carts and ecommerce platforms in Africa, including global e-commerce platform Shopify.

The integration of PayFast into DPO's services will enable merchants and, in turn, individual consumers to carry out transactions across 18 countries in Africa from a single platform.

Jonathan Smit, Managing Director and co-founder of PayFast, said, "Integrating our processing and facilitation capability with the range of online payment services offered by DPO and its huge geographical reach across 18 countries in Africa is an extremely exciting opportunity for both companies. The coming together of two leading online payment specialists will have a positive impact on the African payments landscape and create better future career opportunities for our current and future talent. I am excited to be working with the DPO team in growing the business further in the years ahead."

Peter Harvey, Managing Director and co-founder of DPO Southern Africa, said: "PayFast is a very welcome addition to the DPO Group and I'm delighted to welcome Jonathan Smit on to the board in South Africa. We're looking forward to working closely with the PayFast team to quickly widen the range of services available to our merchants. The demand from African and global companies to make and receive payments reliably, securely and quickly, is growing exponentially. We are seeing this trend from both our SME and multinational customers. DPO Group is now in an even better position to not only meet that demand but accelerate opportunities for businesses and consumers."

Africa expansion

DPO Group confirmed interest in expanding to several additional markets in Africa in the next two years, primarily focusing on the Francophone region.

The company has set up operations in Senegal and Ivory Coast, and is looking closely at Angola, Mozambique, Morocco, Tunisia and Egypt.

They are also keeping an eye on the development of e-commerce markets in yet untapped regions including South Sudan.