Page 5 - demo Golden pond document

A2pay investment proposal 4

2. Summary of revenue streams

1. Wholesale electricity
A2Pay is one of six wholesale licence holders with Eskom. A2Pay currently only vends for 2% of the
South African Eskom Prepaid market and there is a major opportunity to grow this over the next 3
years.

2. The following revenue streams apply to the base:

2.1 Value-Added Services (VAS) provides a solid platform for the business. This includes prepaid Airtime,
Electricity, National Lottery, DSTV payments, Hollywood Bets, Bus tickets. WIFI, Business Services and
starter packs (Rica). A2Pay shares these margins with the merchant who pre-funds his wallet with
A2Pay at convenient top up points.

2.2 The use of the transactional data we receive from merchants via the POS system. This means that
A2Pay receives all transactional data including stock items purchased, stock holding, items sold,
contributions of items sold, average selling and cost prices, basket composition and general sales
trends (dates and times).
Revenue streams include the sale of data, direct advertising opportunities for FMCG suppliers and the
immense opportunity presented by bulk purchasing/wholesaling of these product to the A2Pay
network of stores.

2.3 Financial Inclusion/Unsecured Lending. It is acknowledged that financial inclusion is a prerequisite for
the success of the informal sector. A2Pay Financial Services (AFS) is supported by the SASME Fund
who have provided AFS with R25 million at 2% below prime for loans to Spaza shops with a promise
of more funding. A2Pay’s close relationships with merchants and the data which the business
receives, places AFS in a unique position to service this market. In addition to being an exceptionally
lucrative business, It has many positive spin-offs for both the merchant and A2Pay. If the bulk
purchasing concept is considered, A2Pay can provide the loan via the merchant’s wallet, receive and
process merchant stock order, place the order with a wholesaler/ supplier, arrange delivery and make
payment on the merchant’s behalf (cashless). In time A2Pay could occupy the wholesale space
themselves. Both A2Pay (service fees/rebates) and the merchant (through more competitive pricing)
stand to gain. Such a service will bond the merchant to the A2Pay network.

2.4 Sale of ancillary products. There is an opportunity to supply the network with a variety of useful,
profit generating products such as WIFI, printers/copiers and integrated credit card solutions. The
loan business supports the supply of these products which both offer good returns to qualifying
merchants and to A2Pay. A2Pay is currently in discussions concerning the sale of funeral and other
prepaid insurance products via their network of stores.

2.5 The commercial market. There is also room to sell A2Pay’s products to the commercial market. For
example, the POS system is seen to offer excellent value to a tavern/liquor retailer (who fall outside
of the Jobs Fund criteria).

2.6 Social welfare pay-outs. Plans to handle social welfare pay-outs are in the pipeline and A2Pay’s
founder’s experience in this market is a valuable asset.