Eye on Key Markets


70% of Diners Club’s revenue comes from business travel, and as a wholly-owned subsidiary of Standard Bank, the Managing Director of Diners Club South Africa, Ebrahim Matthews, believes it is well-placed to make a big impact in the rest of Africa. He and editor Dylan Rogers shared a coffee in Johannesburg, and discussed just how far Diners is in widening its reach.

Diners Club offers a payment solution to both consumers and corporate customers, and according to Ebrahim Matthews, Diners would like to be viewed as “a reliable service provider, providing superior customer service, and be able to support both corporates and travel management travel companies as it relates to data.”

Now that sounds simple enough, but what about the bigger picture? Diners clearly already has a good reputation in the South African market, particularly with the role it plays in efficient travel payment reconciliation. But what about the rest of the continent?

“Our focus is largely on South Africa, but we’ve built acceptance for our cards in about 18 markets across Africa, and we have aspirations to start issuing corporate cards in those markets,” says Matthews. “We’ve identified some key markets, with five in particular: Uganda, Angola, Ghana, Nigeria and Kenya.”

No surprise there, as those countries are often cited as Africa’s latest business travel hotspots.

“Kenya is important from a business travel perspective, but also because it’s a reasonably sophisticated card market,” says Matthews. “Ghana is pretty similar, but the size of the economy is not nearly as attractive as Nigeria and Angola. Nigeria is purely attractive because of its scale and size. We’ve seen a lot of demand for a corporate card product in that particular space.”

That being said, what does Matthews make of the technological challenges in Nigeria and the lack of trust in the country’s card infrastructure?

“It’s a big challenge, but the advent of some of the technology we are seeing in the card payment space allows us to overcome a lot of the challenges,” he says.

“The traditional card model relies on a telecommunications infrastructure, but with mobile technology you’re able to overcome a lot of that. Gone are the days where you need a Telkom-type infrastructure and a physical point of sale device to facilitate a credit card or charge card transaction. You’ve got technology now that allows you to use your cell phone as a point of acceptance for card payments and you can use GSM technology and the web for the routing of transactions.”

But, whilst these improvements are being made, the Nigerian market still has a long way to go, before it gets anywhere near its goal of a cashless economy, particularly when it comes to travel payments. And Matthews is happy to concede that a lot of elements need to fall into place, first.

“You need every single party in the value chain to buy into this, so it’s not as if this is something you can force down the throat of an airline or a travel management company,” says Matthews. “You need absolute buy-in and so you need a win-win situation.”

But the wheels are in motion and Matthews is excited about the interest already shown in the markets he’s talking about.

“We get requests from large corporate and investment banking customers on almost a weekly basis, for a corporate card solution in African territories. Today we can’t service those, because we’re not present, from an issuing perspective. But we know there’s a very definite need. So, it’s a massive focus for us,” says Matthews.

Aside from the new markets it is after, Diners Club also has plenty in the pipeline, in terms of its strategy. Most noticeably, it’s looking to enhance its travel solutions by automating some of its data feeds. Very basically, trying to streamline the whole reconciliation process and make life easier for its corporate clients. So, if that grabs your attention, then look out for a product called Diners Club Advantage.

One thing is clear – Matthews is clearly excited by the road ahead.

“There’s a huge opportunity for a product like ours, but we need to move fast, as I don’t think it’s going to be there forever.”

Dylan Rogers