They said that cash was finished. One man has proved its death was greatly exaggerated
Editor, Global Trader magazine
Post date: Monday, 28th May 2012
A company that started in a sleepy Cheshire town has now reached to the furthest corners of the globe. Ukash’s head man David Hunter talks to Eric Jackson about the unstoppable growth and plans for the future.
At the start of this year, Ukash, the online cash payment company, signed a deal with More in Argentina that allowed it to expand from Buenos Aires to the whole of the country.
Which meant a massive increase in the company’s presence in South America and provide a solid foothold for further expansion across the continent. Ukash is now available in 420,000 outlets in 57 countries on six continents.
And it is on schedule to grow revenue and transactional value by over 70% this year, with total transactional value over £450m per annum.
Not bad going for a company that started modestly, 10 years ago, as Smart Voucher Ltd in the small Cheshire town of Bollington, nestling in the foothills of the Pennines on the edge of the Peak District.
It’s a town more famous for its former silk production, once having among the highest concentrations of pubs per capita in England and for its stunning countryside, rather than for high-finance. Ukash’s IT department and the holding company, Smart Voucher Ltd, are still based in Bollington, but the main office is now in central London where David Hunter, who became Chief Executive Officer last year, is based.
There, the sport-loving father of three – his kids range from aged 5 to 12 – plans the further expansion of Ukash, whose ‘vouchers’ are purchased with cash in retail outlets and issued online from the company’s website. The unique 19 digit codes are then used to pay directly with cash on any of the thousands of websites that accept Ukash transactions worldwide. It’s safe and secure as there’s no need to share financial details online, and it’s a means to manage spending as each code is for a fixed, prepaid amount.
David, who lives in Barnes, South West London, believes that the success of Ukash is down to the fact that the “death of cash has been greatly exaggerated.”
Adds David, who enjoys playing golf and football, going skiing and cycling to work when the weather’s fine: “It remains the preferred method of payment in many markets, and Ukash is well positioned to enable cash consumers to shop online.”
David and his team are especially proud tha"t Ukash made it on to the Sunday Times Microsoft Tech Track 100 and received the Queen’s Award for Enterprise in the International Trade category both in 2011 and this year.
"We continue to strive for recognition and support from the industry,” says David, who studied telecommunications and electronics engineering at Brooklands and Merton technical colleges before doing a post grad at Kingston University, specialising in finance and international business.
The company has helped reinvigorate the concept of pre-paid vouchers and eMoney, when it had seemed, with the advent of credit card payments, that they belonged in the past.
But David, who had previously run BT Accurate, ClickandBuy (Europe) and paysafecard UK, was never in any doubt about the appeal of such a method.
“From the day I first ran a prepayment business, I thought that the benefits of enabling consumers to use cash on the internet was so obvious and powerful and was something that hadn’t been addressed before.
"Our investors had real vision in creating Ukash and I’ve followed the progress of the brand since it launched in 2005. I have always liked the simplicity of the company’s concept of transacting with cash online.
"Prepaid vouchers do not belong in the past – Ukash’s suite of prepayment products (including Ukash vouchers and prepayment cards – where a clearly stated fee is payable) enables consumers to gain, or regain, control of spending in a digital age.
"However, ‘vouchers’ is a slightly misleading name as the Ukash code is simply a number that can be delivered on paper, online, in an email or via an SMS. It’s the flexibility of this digital code – true eMoney – that has enabled our success."
And he adds: "Since I was appointed as CEO, Ukash has achieved a remarkable 80% year-on-year business growth, in part by looking after margins, keeping costs flat and constant geographic expansion.
"Ukash has now firmly established itself as a global player in the online payment industry, and in my view it has an extremely bright future."
That is in spite of the dramatic fall in credit card fraud, owing to increased security, in recent years, and David does not see that as an obstacle to far greater interest in Ukash.
"Unlike credit and debit cards, Ukash is private, with no need for consumers to reveal personal financial information to pay, play and spend online," he says.
"We know consumers are increasingly demanding the ability to use their cash online, easily and conveniently. There will always be a place for credit cards and other traditional forms of payment.
“However, we firmly believe – and our growth demonstrates – that Ukash provides a viable alternative to those consumers who are looking for control over their spending without the cost of credit-based charges."
And David feels that people in the emerging countries of Africa, can benefit from Ukash, which is probably why South African-based Blue Label Telecoms – a distributor of prepaid secure electronic tokens of value and transactional services – became a strategic partner in 2008.
"Cash is the main way to transact in developing countries. Ukash can also be used to pay as simply on mobile as on a PC/tablet, which is very important for the youth segment in all markets and for many consumers in emerging markets who may not have a home PC but transact through their mobile phone," says David.
"It opens up online spending for large swathes of people who may or may not have a bank account or don’t feel comfortable revealing their bank details online. Equally we are seeing previous ‘cashless societies’ return to cash with growing frequency."
David was involved in the Get Safe Online campaign last year, and Ukash has a dedicated fraud team that works with the authorities to prevent fraud across all its territories.
"We advise people to be vigilant. Ukash voucher details should NEVER be given to cold callers or doorstep sales people. The simple message is to treat Ukash with the same security as you would physical cash," he says.
But despite all the success, Ukash has no plans to rest on its laurels.
"We are working on some exciting new plans at the moment which we will announce later this year," says David.
"We are in the process of developing a brand new website with a new digital creative and multi-lingual capabilities. This will provide the platform for our users to interact with us through all channels and will provide many enhanced capabilities to both manage and use Ukash.
"In the next decade, I see Ukash as a leader in the payments industry, accepted by mainstream online retailers and with an even broader global presence. Where you see Visa, MasterCard and PayPal, you should expect to see Ukash."
Ukash is regulated by the UK Financial Services Authority (FSA). The maximum single voucher value allowed is £200 or equivalent in other currencies, and the maximum amount that can be held by an individual customer is £1,000 or equivalent in other currencies.
This article first appeared in Global Trader Magazine, Issue 4, Spring 2012. To read the entire publication, click on the ebook.