Sanlam acquires the fintech company Q Link

Financial services group Sanlam has acquired a controlling stake in payment solution provider Q Link Holdings, its first fintech investment.

Sanlam Private Equity (SPE) has agreed to acquire the shares of Q Link from the UK-based private equity fund Apis Partners, the local private investment firm Multiply Group and other minority shareholders.

Q Link provides payment application software to the South African insurance industry and other third party benefit providers.

The software manages the deductions in both payroll and bank collection flows.

SPE Managing Partner Paul Moeketsi said the company has been closely monitoring the fintech space ahead of the acquisition

“We are seeing significant social impact, particularly with regards to financial inclusion and the improvement of the lives of previously disadvantaged communities through the provision of financial access, high growth and good return prospects from this sector.

Moeketsi said Q Link has a solid business model and has been the preferred payment collection partner for many insurance companies for over 20 years.

Paul Moeketsi, managing partner of SPE

Q Link founder and president Henry Smith said the company was looking forward to working with SPE as it entered the next phase of its business growth.

“We are delighted to align with a commercial investor who understands the importance of Q Link’s continued independence as a strategic payment collection partner for several insurance companies in South Africa,” said Smith.

What Q Link offers

Q Link serves over 4.5 million employees, raising R4.5 billion in monthly premiums for over 133 clients, many of them in the insurance industry.

Sanlam explained that the company’s software has improved collection success rates by optimizing costs.

“The concept of ‘accessibility and control’ ensures that only valid and affordable deductions are processed through employee payslips,” the company said.

“Currently, the company facilitates the collection of more than 30% of all recurring retail life insurance premiums in the country.”

“The Emolument Attachment Order solution has saved South African public sector employees over Rs 300 million in invalid and excess court order deductions since 2014.”

Sanlam expects the deal to increase direct jobs by approximately 28% over the next few years.

“This will happen through the launch of the new Moneyhub service, a consolidated collection and payment platform, which integrates payroll deductions, debit orders and prepaid debit orders (EDO) in line with the new mandate authentication process, DebiCheck, ”said Moeketsi.

An additional 757 indirect jobs will be created in the economy as a whole, according to the National Treasury’s domestic output multiplier for the finance and business services sectors and the company’s projected revenue.

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