Kenya Financial Services: David Morema Presents Virtual Pay, the Global Digitized Payments Gateway

Interview with David Morema, CEO of Virtual Pay

Could you provide an overview of Virtual Pay and the services it offers?

Virtual Pay is a payment service provider specializing in niche industries. We offer various payment collection methods including card collection (Visa and Mastercard), ecommerce, card-present, POS machines, and our latest project, tap-to-pay on Android. Additionally, we facilitate mobile money collection across multiple African countries and are regulated in jurisdictions spanning Africa, Dubai, Thailand, and other parts of Asia, ensuring a global presence. Our clients, predominantly financial service providers such as Forex brokers, securities dealers, asset management firms, and mutual funds, benefit from our expertise. We also cater to non-financial service sectors like airlines and travel companies through our ecommerce solutions. For international firms lacking a strong presence in Africa, we handle mobile money collections, convert funds, and remit them seamlessly. In essence, these are the comprehensive services we offer.

Can you give us a comprehensive insight into your professional background and the array of services Virtual Pay provides to financial services firms worldwide?

Initially, I worked in financial services as an accountant and am a chartered financial analyst. Throughout my career, I have assisted numerous financial services firms in setting up their businesses globally. This has given me deep expertise in global corporate law. Whether it is setting up a business in Singapore or navigating corporate laws in Mauritius for insurance or asset management, our firm has extensive knowledge and partnerships in these regions. Over time, we have built a loyal client base spanning multiple jurisdictions. Many of these clients have been with us for over 15 years, relying on our expertise not only in initial setup but also in ongoing compliance with local regulations. Financial services are heavily regulated, and our clients value our ability to manage compliance across different countries, sparing them the complexity of establishing dedicated teams in each jurisdiction. This trust has led us to expand into payment services for our clients, a natural extension of our relationship. For instance, in Dubai, London, South Africa, the Cayman Islands, Belize, and other financial hubs worldwide, we have facilitated the establishment of numerous businesses, earning the trust and loyalty of our clients. Our deep knowledge of global corporate law in these regions underpins our success and reputation in the industry.

Can you tell us about your new project at Virtual Pay?

We are very excited about our new project. Traditionally, card processing has encompassed ecommerce and online payments, along with card-present transactions where customers physically tap or insert their cards into POS machines. However, POS machines, although long-established, are now being phased out. Due to advancements in technology, particularly the ability to tap cards on Android phones via NFC, users can now tap their phones to transmit card details. Once the card details are received, the seller can input the amount, and the cardholder can confirm the transaction with a PIN.

We are proud to pioneer this technology in Africa, certified by both Visa and MasterCard and already operational online. We firmly believe it is a game changer. Traditional POS machines are bulky and stationary, limiting their use to those who can manage and charge them. This new innovation transforms any Android phone into a portable POS device, offering mobility and convenience to everyday users like taxi drivers and market vendors who previously could not use POS machines. Now, their Android phones can serve as their POS device, making transactions more convenient and facilitating easier payment collections, reducing reliance on cash transactions. We are excited about the potential impact this will have, making sales more efficient and accessible across various markets in Africa.

What is your target market? Are you mainly focusing on the retail market or the banks and other larger financial institutions?

We are very reluctant to enter the retail market with our product due to the challenges of client acquisition and market penetration. Instead, our primary focus is on collaborating with banks and other larger financial institutions. We see banks as strategic partners because they already have established client bases. Rather than competing with them, we offer our product as a white-label solution. Our branded version is known as VP Smart, available for download on the App Store. However, we provide flexibility for other financial institutions to brand the product according to their preferences and distribute it to their merchants.

Why is this product advantageous for banks? Imagine a scenario where a bank collaborates with a chain of restaurants that currently use traditional POS machines. With VP Smart, the bank can offer these restaurants a mobile payment solution. Once employees download the app and complete the compliance process, they can use their phones to accept payments directly at tables. This eliminates the need for restaurants to rely solely on POS machines for each transaction, significantly enhancing convenience. For instance, a restaurant employing 10 waitstaff no longer needs multiple POS devices constantly in use.

We believe this solution benefits banks by increasing their sales potential. It also extends to small business owners like taxi drivers and market vendors who operate mobile businesses and previously could not use POS machines due to their bulkiness and impracticality. Now, these individuals can use their own or provided Android phones equipped with VP Smart to accept payments. This accessibility expands banks’ reach into previously underserved markets.

Ultimately, by facilitating easier payment collection for smaller businesses, we anticipate broader economic convenience and growth across Africa.

Can you provide an update on your upcoming launch plans?

We are aiming to launch in Zanzibar in August. Following that, we will assess our approach for a potential launch in Kenya. Currently, we have begun engaging with banks and have started conversations with CEOs to introduce our certified product. It is important to note that our product is already certified by Visa and MasterCard. Our primary focus is on collaborating with banks. Our strategy is to establish partnerships with banks that are built on mutual benefit rather than competition.

What are your expectations for your new product in the market?

Our expectations are to take the market by storm. We are the first to get certified, and we believe we have a significant advantage because of that. We aim to be the pioneers and want to quickly dominate the market, much like how AI is rapidly transforming the internet. Our goal is to lead the tap-to-pay revolution across Africa, especially within the continent.

Can you give us some examples of the retail clients who would benefit the most from your product?

Certainly. Let’s look at the types of retail clients who would find our product most useful. For instance, boda-boda riders are perfect candidates. Similarly, taxi drivers, restaurant owners with waitstaff who need to collect payments on the go, and any small businesses that struggle with using traditional POS machines can greatly benefit.

In our local markets, where vendors sell vegetables, clothing, and other goods, these individuals often find POS machines too cumbersome. Small shop owners also fall into this category. We believe these are the people who will gain the most from our product. We aim to encourage banks to promote and sell this product to these clients, as it can significantly enhance their payment processes.

How do you see Virtual Pay evolving in the medium term, say over the next three years?

In the next two to three years, our main goal for Virtual Pay is to obtain an acquiring license from Visa and, subsequently, from MasterCard. This is a project we are working on very intensively. We have already completed our GRS audit and performed well, although there are still a few areas we need to address. This initiative is our top priority over the next two years.

We aim to become a full acquirer, similar to a bank. About two years ago, Visa approached us, expressing interest in us applying to be an acquirer. They provided us with a comprehensive list of requirements, and we have been diligently working through them. We feel we are getting close to achieving this milestone.

Becoming a full acquirer means we would interact directly with payment schemes like Visa and MasterCard, without the need to go through a bank. Currently, we have to collaborate with several acquirers, which can sometimes lead to delays. By becoming a direct acquirer, we can streamline our processes and offer more efficient services. This vision is the most significant focus for us as we look to the future.

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