Minimise Risk and Maximise Reward with Multiple VAS Providers

August 12, 2020

Mordechai Serraf

Mordechai Serraf

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Minimise Risk and Maximise Reward with Multiple VAS Providers

Unless your VAS setup is able to access multiple providers and can offer you multiple transaction channels, you’re not getting all you can out of it. Electrum Solutions Architect Mordechai Serraf takes a look at how you can fine-tune your digital goods and services business for maximum profit, speed, and flexibility.

Our 2022 Digital Goods and Services Report describes the potential for value-added services in South Africa – a sector that’s already worth R35-40 billion a month. South African businesses have been at the forefront of VAS innovation, but to extract maximum value, they’ll need to have access to multiple providers. If that sounds like something you’re aiming for in your business, there are a few important considerations.

Single switch, multiple benefits

Having access to multiple VAS providers via your VAS switch is a must in this industry. It gives you the buying power to negotiate for the best commercials, extracting the maximum value for your business, and in the end, your consumers. A prime example is the airtime case. If you have the ability to pick and choose who you buy airtime from, you have the power to find the best prices. Having a multiple-provider solution for airtime also means that you can take advantage of the different types of airtime offerings – fixed airtime, variable airtime, or even direct top-up at your tills. In addition to being able to select the best commercials, you are able to offer consumers more choice, ultimately giving them a better experience and keeping them coming back for more.

Root out costly routing

The next step to ensuring maximum value for your business is making sure that your VAS switch has least-cost routing capability. This will give you a real advantage over your competitors because you can analyse, select, and direct the path of transactions according to which path delivers the best rates. Besides the cost-saving benefits of least-cost routing, a good VAS switch, like Electrum’s, has automatic fail-over for when your preferred provider goes down, allowing for a better customer experience and differentiating your business further.

The prepaid electricity case provides a great example of the benefits of least-cost routing. Municipalities regularly go out for tender to new service providers, meaning that costing and availability change. Electrum has access to the full footprint of all municipalities in South Africa through integrations to various aggregators and providers. This allows us to easily switch between these partners. The result is that you continue to get the best commercials for prepaid electricity, and consumers can continue to buy electricity from any municipality, even when tenders result in a change in service provider.

Like sand through the hourglass …

At Electrum, we’re not big soapie fans, but we do like to describe our VAS switch as an hourglass. On one end, there are multiple VAS providers, while on the other there are multiple payment channels – all connected through one point of contact. The ability to process omni-channel transactions (from mobile devices, kiosks, ATMs, retail POS and PEDs) through a single switch has several benefits.

  • Having a single integration point eliminates having multiple points of failure, resulting in more reliable services and system stability.

  • Any changes, such as adding new providers, can be effected faster, eliminating potential downtime and reducing costs. Speed to market is a vital benefit in a retail environment that’s as competitive as South Africa’s. You’ll want to know your VAS switch is agile enough to keep pace with the rest of your business.

  • Reporting and monitoring becomes much more efficient, especially when coupled with other systems like Electrum’s finance automation package.

  • You can also leverage your omni-channel offering to boost your digital strategy. Offer your customers more ways to transact, more reliable services, increased VAS products, and increased engagement through targeted marketing.

If it’s not tested, it’s not worth it

Here’s an inside tip – unless the system you’re looking at is ready out the box, think twice. Choose production-tested enterprise solutions to make sure your system can handle the rigours of real-world transaction processing. Opting for a solution that isn’t built to cater to your needs as an enterprise will leave you vulnerable under high transaction loads, and susceptible to periods of failure and downtime – bad for both revenue and reputation. You need a robust system that allows you to add new services easily as market conditions change and new services become available.

If you’d like to chat about how your business can use multiple providers to maximise value from your VAS offering, get in touch.

Mordechai Serraf

Mordechai Serraf

Mordechai Serraf works in Strategic Partnerships and Commercials at Electrum. He holds a BSc Honours (First Class) in Computer Science from the University of Cape Town and has worked in software development and payments industry since 2015.

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