ALTRON FINTECH: Enabling the Journey from Cash to Digital

South Africa’s financial ecosystem has not evolved substantially over the past three decades; hence cash continues to dominate financial transactions. Bridging this gap requires not only technology but inclusive trust. Altron FinTech, a division of JSE-listed Altron Ltd, has been at the forefront of enabling secure, efficient digital payments while addressing the persistent challenge of financial inclusion. 

Altron FinTech has evolved and grown from a predominantly specialist hardware provider into a multi-line business covering payment terminals, transaction switching, credit management, and identity solutions and platforms. Gellatly, trained as an electronic engineer, has spent decades developing and implementing large complex systems that handle millions of secure transactions annually, and with this track record positions him as one of the foremost experts on South African digital financial transaction mechanics.

“As the Altron Group we just celebrated our 60-year anniversary last year. That is quite an achievement for a company focused on ICT and platform solutions, not many companies can celebrate such a milestone and we are proud of our heritage.” he tells Enterprise Africa.

His career spans design and development of physical engineering solutions, IT development, and executive leadership across Africa and Europe. “I worked for a long time in the physical electronics industry – building physical electronic systems. Altron gave me the opportunity to start an IT development business in Cape Town, and we were in the right place at the right time at the start of the boom in the mobile telecoms market. We built a software business and created IP that is still being deployed by telcos in South Africa – it was a fantastic time, it felt like a never-ending roller-coaster ride, loved every minute of it. I then had the opportunity to get into executive leadership in the group and was asked to look after the manufacturing and services businesses in Africa and France, that provides BSS solutions to telco’s. The group required focus and growth for their fintech cluster of businesses and that is what I have been doing since 2007. It has been a marvellous journey, and I am very thankful for the leadership guidance and team I have access to, to assist me in growing the business in a highly fast paced evolving and growing fintech sector. It feels like 1996 all over again, just a different roller coaster in a different business sector, I am revelling in it.”

Altron FinTech’s operations span card issuing, credit management solutions, debit order payments and collections, secure identity systems, and digital transaction switching. “These are radically different lines of business within our business focused on hardware and software solutions, and when combined makes us a solutions and service provider that can compete aggressively,” Gellatly explains.

PERSONALISATION AND ISSUANCE

This line of business supports niche banks that have in-branch instant issuance and personalisation of bank cards. Consumers opening accounts can leave branches with personalised cards fully activated for use across the national ATM network and retail payment acceptance pay points. “We provide and service the desktop equipment for personalised and instant card issuance. The solution is integrated with the bank’s back office and when the consumer opens an account, and meets all the required Financial Intelligence Centre Act (FICA) criteria, the bank consultant can issue the consumer with a personalised bank card with the chip and magstripe active. The consumer can then immediately transact at any retailer pay point or ATM in the country,” says Gellatly.

Similar technology is used for secure access control to offices and industrial environments where businesses are required to manage access control to their premises and certain business areas across campuses. “Our solution personalises visitor and employee cards for access control and security monitoring – particularly popular in financial services, mining, and retail back-office environments.”

At a larger scale, Altron FinTech supports governments with their national ID issuing service. “Similar equipment is also supported at bureaus that offer a service of bulk issuing of personalised bank cards. For more than 30 years, we have been in partnership with a USA-based OEM offering multiple business verticals across national markets, supporting this line of business.” 

PAYMENTS EVOLVED

Bank and retail payment acceptance and processing solutions have been central to Altron FinTech’s operations for decades. The company was there at the inception of card payment acceptance in South Africa and has continuously evolved its offerings. “For more than 30 years, we have been assisting the banking industry with the provision and support of card acceptance payment terminals,” details Gellatly. “We have built a business around the provision and service of these products that evolved from swiping a card to inserting a card and entering a pin, and now it is just a simple tap of the card to initiate the payment and authorise the transaction. The product and service can be offered as a stand-alone solution or fully integrated into the retail enterprise back-office and cash register systems. We provide the hardware, software integration, and the on terminal payment and management application that is developed by our own team, that is real value creation.”

Modern terminals can now support a range of applications beyond just the payment application. “The new range continues to get better, and the pace of innovation in this space is moving exponentially. Similar to mobile phones a mobile app store concept is also being adopted and deployed on these terminals, meaning multiple business apps can run on the terminal performing different business tasks i.e. stock counting, information capturing, e-receipting etc,” says Gellatly.

Altron FinTech also boasts an agnostic platform for payment transaction token type app development, and the ability to develop many different payment acceptance tokens beyond the traditional plastic card. “Cards have always been swiped or dipped or now tapped, but now we have different options such as closed loop private wallets, QR codes, store vouchers, BNPL, prepaid airtime and data, bill payment acceptance etc. These devices can now be leveraged to facilitate and support business processes in a range of different ways that was not possible before. It has moved from only card acceptance to a business transactional enabling application and platform,” Gellatly details. 

Importantly, the company operates an independent fully internationally certified transaction switch platform that connects retailers to all South African banks. “You can contract with us, and we will handle the switching and delivery of transactions to whichever bank you want to use. This is provided as a service to large retailers that include customers such as Massmart, Cashbuild, McDonalds, H&M etc. We also service smaller retailers with one, two, or three stores and SME’s with exactly the same commercial business models and products solutions. Our transaction switching service goes together with our payment acceptance terminal range that is offered as a separate or a bundled service.”

CREDIT MANAGEMENT

The microfinance business sector offers an opportunity to innovate the credit management value chain while maintaining and supporting the important regulatory compliance requirement. “We have identified that there is room for radical improvement to manage the interaction between the consumer who is applying for credit and the credit provider,” Gellatly explains. “Regulation and tighter oversight on how credit is extended, opened an opportunity for us to capitalise on this niche market. We built our credit management solution that can be deployed as an on prem or cloud solution for large or small customers. Our application now can perform the required FICA checks online during onboarding, perform the necessary checks through to the country’s various credit bureaus as part of the affordability process, and it can capture signatures, photos, and fingerprints digitally to comply with regulation.”

Payments, collections and settlements are offered through a national payment platform engine capable of hosting multiple customers, all developed internally in collaboration with our customers. “When unsecured credit is extended, it must be collected, either on a monthly or on a regular basis. For that, we built a national platform engine that collects the agreed collection amounts on behalf of our customers effortlessly on the agreed dates between the consumer and credit provider.” 

Altron FinTech has been an innovation pioneer in most of its lines of business. “In the early stages, there was no competition. As time has passed, innovation and technology have sped up, and we have had to stay on top of our game to stay ahead of the pack,” admits Gellatly.

BUILDING TRUST

Despite advances in the digital transaction space, cash remains king in South Africa, and many consumers and retailers are still hesitant to adopt or make use of digital payments. “60% of commercial retail transactions are still cash,” Gellatly points out. “Clearly, there is a segment with a strong preference for cash transactions, so we are looking at how we get into the market to digitally include this segment of consumers and retailers.” 

He suggests that the continued distrust in digital financial systems has not been addressed properly, and with each passing innovation, bridging the gap becomes more difficult.

“In the cash space, I give you money, you give me a product, and we are both satisfied that the transaction is done – instant gratification. In the digital space, there is this blind faith that when I tap, some money will be moved between the consumer and retailer accounts, and the retailer has to part with the goods. There is an element of hesitancy and distrust, that must be addressed. As a country, and as an industry, we haven’t done a good job to bridge the gap to build trust in making use of digital payment systems.”

The fee structure for digital transactions, he says, is still based on the construct of the developed world. “Here, the consumer and retailer believe that their money is being eaten, mainly by fees, so we must get the message across of the value we deliver, and that business is conducted with the highest levels of professionalism and can be trusted. We, as a homogenous service provider community making use of the national payment system, have not managed to crack that just yet. We must address the fee imbalance and create a similar experience as with cash, instant gratification for consumer and retailer making use of a digital transaction at a fee that is viewed acceptable to consumer and merchant for the convenience.”

Micro-transactions pose a further challenge. “With the current fee structure, the merchant requires to add a significant value to the transaction for it to make commercial sense at the R10 or R15 price point. How do we offer a digital transaction that can compete with cash? We have never gotten beyond that, and we need to create a trusted product, at a fee structure that is acceptable to the consumer and merchant, and that is our biggest challenge right now.” 

INNOVATION AND SECURITY

Altron FinTech combines agility with caution. “We will not take risks from a safety and security perspective, and investments must align with the requirements of customers and consumers. We differentiate ourselves on reaction time, agility, staying abreast of technology, innovation, and building our solutions that solve for real problems. The world is not going to accept a single source supplier; we have to partner.” says Gellatly. “We don’t innovate for the sake of innovation – we are not an R&D centre,” he adds. “We have a large portion of employees that are dedicated to building our solution stacks and evaluating partner solutions that can add value to our customers and deliver business outcomes for them. We are looking at the big question of what AI will do. We are going down the AI road cautiously, and we are testing small things and evaluating what is possible. Because we are close to consumer and customer finances, and we live in the financial transaction processing space, we must be extra careful that we do not allow bad actors to enter the national payment system. We must be cautious and prudent, and our testing cycles have to be rigorous. We are looking at AI, but how we go about it will be handled in a measured manner.”

Compliance runs throughout the entire service supply chain and has become second nature for the company. This mindset has allowed Altron FinTech to consistently succeed in complex audit environments meeting domestic and international certification and regulatory standards. “We deploy hardware and software platforms where we partner with international businesses because the products are simply not available in South Africa. We have regular interactions with these entities, because they are closely aligned to best international practices in the financial sector. Mastercard and Visa have their requirements – and there are many more across the industry, and we must comply with them all. Local suppliers include telcos, connectivity partners and banks, and we cannot operate without them. We are deeply entrenched together as partners, and we cherish and grow these partnerships. We are regularly audited by the banks to ensure compliance, and we have a large compliancy team to ensure we meet their highest standards,” Gellatly confirms. 

PEOPLE AND PURPOSE

Gellatly believes the company’s future lies in its people and their impact. “I am of the view that happy employees automatically translate into happy customers. There are two things close to my heart. Firstly, our people. We have the very best people who make the whole organisation tick. If we don’t invest in, upskill, and develop our people, we will lose. Our values are core to how we operate and our people must align to these values, and we are constantly reinforcing that. We strive to have the right solution, for the right customer, with the right people. Secondly, financial inclusion. The policy makers and regulators have not adequately addressed this major challenge. As a company, we are passionate about making a difference so that we include people in the digitisation of financial transaction services. I believe, we have the right team of people to innovate and enhance the right products, and when combined we will contribute towards the financial inclusion goal for South Africa.”

Altron FinTech’s evolution, combining hardware, software, and platform services, continues to shape South Africa’s digital economy while tackling the persistent challenges of trust and inclusion.