In a move that highlights the threat from FinTechs to traditional FIs, South African PayTech, Net1, is to acquire a 30% interest in Liechtenstein-based Bank Frick. Terms of the deal were not disclosed and it is subject to approval from the Liechtenstein Financial Market Authority. Net1 will also have a two-year option to acquire a further 35% in the bank.
The company last year entered into a long-term co-operation agreement with Bank Frick to become its strategic banking partner for the provision of the support and banking services required to deploy Net1’s products and services, including VCPay, Finetrading and money remittances in Europe. Serge Belamant, Chairman and CEO at Net1 comments: “We have received invaluable support from Bank Frick and we have jointly identified many exciting joint opportunities that would require funding, whether for our working capital finance, card issuing and acquiring or transaction processing activities. We decided to become a strategic investor in Bank Frick to cement a critical component of our international activities as we are completely reliant on having a stable, long-term and strategic relationship with a fully licenced bank – being a significant stakeholder is the best way to ensure alignment and longevity. We have agreed with Bank Frick that approximately USD30 million of its free equity will be utilised as seed capital for a fund dedicated to our future activities.”
“Net1 possesses enormous digital know-how. With the expansion of its involvement, we will be able to strengthen our current business areas, drive forward our FinTech strategy, develop new digital business models and enter new markets,” says Mario Frick, Chairman of the Board of Directors of Bank Frick. “Thanks to the scale effects this will bring, we can face the increasingly complex regulatory environment more effectively.”