Three out of every 10 payments in Africa fail, according to reports. Factors behind this range from a fragmented payments landscape and invalid cards to dormant accounts and higher dispute rates; they surface yearly leading to a $14 billion loss in recurring revenue for digital businesses across the continent.
These problems are bound to increase as digital payments in Africa continue to grow, 20% year-on-year, per some reports. And while gateways and aggregators have made it easier for businesses to accept multiple payment methods, few solutions exist to aggregate them for necessity’s sake and deal with payment failures that arise from each platform. That’s where Revio, a South African API payment and collections company, comes in. The fintech which makes it easier for businesses across Africa to connect to multiple payment methods and manage payment failures is announcing that it has raised $1.1 million in seed funding.
Fintech investor SpeedInvest led the round, with participation from Ralicap Ventures, The Fund and Two Culture Capital. Several angel investors also participated 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 Ruaan Botha in 2020. As a professional who has worked in South Africa’s banking and insurance industries for over a decade, Botha decided to launch Revio after seeing how much time and manual effort businesses spend in engaging customers on outstanding and failed payments. It was clear that very few companies had invested meaningfully in revenue recovery. When asking over 25 clients where they would invest $1 if they had to fix their payment systems, most of them said they’d spend at least 90% of that money on managing payment failures and customer churn.
“We have the debit order as the largest recurring payment method in South Africa. But the moment businesses want to start adding other different payment methods to deal with customer demand, it was super hard for them to do so,” Botha told TechCrunch in an interview. “And it was just because of the disconnect between banks, new fintechs and payment aggregators which 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 any payment methods that they need, not only in South Africa but the rest of Africa and globally as well.”
Botha is joined by three executives who run the company affairs: Chief commercial officer Pieter Grobbelaar, an ex-country lead at Flutterwave; chief technology officer Kyle Titus, who has experience working with fintechs and a venture studio and chief operating officer Nicole Dunn, a venture builder and operator that has worked with multiple African startups.
Dunn, on a call with TechCrunch alongside Botha, said Revio aggregates and orchestrates over multiple different payment methods in Africa including card, bank transfer, debit order, mobile money, vouchers, and QR code. The platform collects and settles payments in more than 40 markets through payment providers like Flutterwave, Paystack, Ozow and Stitch. Some of its features, in addition to multiple payment methods, include smart payment routing, automated billing processes, auto-retires, and real-time analytics and reporting.
In over a year of operations, Revio has onboarded over 50 clients and processes thousands of transactions monthly. They range from large-scale enterprises to mid-market corporates, and fast-growing scale-ups that are involved with recurring revenue businesses and high transactional volumes, typically needing multiple payment methods in multiple markets. These are often insurers, telcos, retailers, subscription software or media, asset leasing or financing businesses, and alternative lenders.
“We’ve also then built out orchestration capability where we can reduce payment failures through things like smart transaction routing, smart retries to make sure a customer doesn’t go into arrears, specifically on recurring payments,” said Dunn. “And then where we differentiate ourselves is that we serve businesses with recurring revenue instead of the typical e-commerce platforms.” She adds that Revio has over 100 clients in the pipeline waiting to be onboarded.
Payment orchestration is becoming increasingly important in today’s world where businesses operate in multiple countries and need an array of payment methods to get by. While a handful of such platforms have existed in the U.S. and Europe to handle this heavy lifting via unified payments API such as Primer, Spreedly and Zooz, businesses in developing markets are starting to see identical platforms such as Revio and Egypt-based MoneyHash take center stage across various regions.
On the subject of competition and how it stands out, Revio claims that it’s the first African payments platform focused on payment failures and revenue recovery. “We also have more functionality and coverage in the sub-Saharan African context, Sub Saharan compared to other platforms in the market,” Dunn added. Anyway, the global payments orchestration market, per reports, is growing at a fast pace (per a study, the market size is expected to reach $6.52 billion by 2030, advancing at a CAGR of 24.5% from 2022 to 2030) and there’s more than enough space for newer platforms to grab market share – and incumbents like Revio to deepen its reach.
It’s one reason why the two-year-old fintech raised this capital: move into new markets within and outside Africa, expand its team in the process and launch new products for its increasing clientele.
“I’d say the use investment is twofold,” Botha said. “One is to get access to more strategic skills around machine learning and data to help us grow and drive better engagement with customers, understand why they fail and how to get a better response rate. With the data from that, we can start our experimentation into some of the core markets in Africa. We want to operate in about 13 African countries in the next 18 months, but focusing on three or four large markets. And then, get enough traction that we can take on to other emerging markets like Latin America.”
Source : https://techcrunch.com/2022/11/25/revio-allows-african-businesses-to-connect-to-multiple-payment-methods-and-reduce-payment-failures/