Lesaka’s plan to improve performance in merchant business

Lesaka Technologies’ plan to improve performance in its merchant business relies on a similar playbook used for the consumer division.

The company until recently consisted of two divisions: a merchant unit and a consumer segment. The consumer unit focuses on products such as unsecured credit, transactional banking, micro-insurance, and value-added services through the EasyPay platform. After the acquisition of prepaid electricity submetering and payments business Recharger, the group now has a third division: enterprise.

Over the years, the merchant side carried the JSE and Nasdaq-listed business’s growth and earnings, but that momentum has stalled.

Last week, the division reported a 10% decline in revenue to R8.61bn for the year ended June 2026, while net revenue was up 3% to R3.096bn. Segment-adjusted earnings before interest, tax, depreciation and amortisation (ebitda) fell 6% to R602m.

CEO Lincoln Mali told Business Day the strategy to grow in merchant trading focuses on four key steps.

The primary strategy is to cross-sell or “layer” multiple products to the existing customer base rather than relying on single product sales.

“The first thing we have to do is layering products in the corporate space,” Mali said in an interview.

He noted that adding acquiring and lending to clients already using their point of sale system “changes the ARPU profile of that customer beyond belief, and therefore we don’t have to chase the next customer when we haven’t done our work”.

Second is building stronger relationships with customers. The company is expanding beyond its strong base of spaza shops to target larger players, aiming to compete with opponents who hold strong ties to “wholesalers, with cash and carries, and large distributors”.

“We’ve now gone and built relationships at that level so that we are attacking the market on both sides,” he said.

Third is the ongoing effort to integrate acquired business into a cohesive operation.

The group has made a number of notable acquisitions locally, including the R3.7bn Connect Group acquisition in 2023, the R1.6bn buyout of Adumo in 2024, acquiring Recharger for R504m in 2025, and the still to be finalised R1.1bn takeover of Bank Zero.

Mali said integrating four acquired companies requires minimising duplicate efforts and achieving cost synergies and using their combined scale to negotiate better terms with suppliers.

Last, the company is restructuring compensation for sales staff to encourage the sale of multiple integrated products rather than standalone solutions.