R1bn deal targets backbone of SA payments system

A little-known payments infrastructure company that handles more than R60-billion in transactions a year is changing hands for R1-billion.

Araxi, a JSE-listed technology group that supplies payment and software systems to banks and large enterprises, has agreed to acquire a controlling stake in Pay@ Group, one of the biggest independent bill-payment processing platforms in Southern Africa.

Pay@ operates across more than 9,000 retail locations and 150,000 mobile point-of-sale devices, alongside digital platforms, with operations extending into Namibia, Botswana, Zimbabwe, Eswatini and Lesotho. In the year to 28 February 2025, it generated revenue of R271.2-million and EBITDA of R130.2 million, with no third-party interest-bearing debt.

“This transaction unites two leading participants operating in different areas of the South African payments ecosystem,” says Bradley Sacks, chief executive of Araxi. “By leveraging our complementary strengths, we will deliver a powerful, end-to-end fintech proposition for clients and unlock significant value for stakeholders. With no overlapping products, Araxi and Pay@ together create a seamless platform that supports faster innovation, broader solutions, and greater long-term value.”

The company states that Pay@ processed more than R60-billion in transaction value over the past 12 months and achieved a compound annual revenue growth of 22% over the past three years. Its core activities include utilities, insurance premiums, remittances, loan instalments, subscription services and public-sector collections.

Says Andrew Hardie, chief executive of Pay@: “We are excited to combine our extensive platform and experience with Araxi’s deep tech skills and digital and cloud expertise. Araxi has proven its bone fides in the areas in which it operates and will provide Pay@ with strategic support to fuel our continued growth.”

The scale of those recurring payment flows sits at the centre of the deal. Utility bills, insurance contributions and instalment repayments are high-frequency transactions embedded in household finances. Control of that aggregation layer provides steady transaction volume and visibility across multiple sectors of the economy.

The network blends physical and digital reach. Pay@’s footprint includes more than 125,000 physical and millions of digital access points across sub-Saharan Africa. In a market where many consumers still rely on retail counters and assisted payments, that distribution layer connects billers to supermarkets, forecourts and independent retailers where customers settle obligations in cash or by card.

The acquisition consolidates that aggregation infrastructure inside a broader enterprise payments and software group. South Africa’s payments environment has traditionally been layered, with banks operating switching infrastructure, retailers hosting bill-payment terminals and specialist processors linking billers to distribution networks. Bringing a large independent processor into a listed technology group alters that structure.

Araxi will fund R200-million of the purchase price from existing cash reserves and R800-million through committed senior debt.

“Gearing levels post-completion of the proposed transaction will be relatively modest and comfortably serviced by operational cash flows,” the company states.

Debt-backed consolidation of this scale depends on stable transaction income. Payments processing, particularly in recurring bill categories, behaves more like essential infrastructure than speculative fintech.

Internationally, the payments sector has followed a similar path, with processors combining switching, merchant services and software platforms into integrated groups capable of handling large transaction volumes while layering analytics and value-added services on top. The Araxi–Pay@ transaction follows that direction at a regional level.

Says Hardie: “Our new relationship with Araxi also presents Pay@ with unique opportunities and opens new horizons to deliver significant value for our partners, clients, shareholders, and employees.”

The transaction remains subject to shareholder approval under JSE Listings Requirements. If approved, one of Southern Africa’s largest independent bill-payment networks will operate within a larger technology group rather than as a standalone processor.