Net 1 UEPS Technologies Inc. will buy a 98.73% stake in KSNet Inc., a South Korea-based payment processor, the South Africa-based payments-technology provider announced last week.

In a statement, Net 1 valued the purchase at 270 billion Korean won (US$233 million or 175 million euros). The companies expect to close the transaction in the second quarter of 2011.

KSNet services a broad range of industries in South Korea, including credit card, retail and wholesale merchants, financial institutions, governmental organizations, utility companies, and e-commerce businesses. KSNet’s customer base includes approximately 200,000 merchants, and the company processed more than 1.4 billion transactions in 2009.

Net 1 also operates a value-added network business in South Africa similar to KSNet’s called EasyPay, and it hopes to incorporate KSNet’s platform and enter the Asian market, according to Serge Belamant, Net 1 chairman and CEO.

“We will also introduce key products and services from Net 1’s EasyPay and Mobile Virtual Card offerings, providing a comprehensive and differentiated [service] to cardholders, financial institutions and merchants in Korea,” he adds.

Net 1 provides its so-called universal electronic payment system as an alternative payment system for the unbanked and underbanked populations of developing economies. The system uses smart cards that conduct transactions immediately but offline, unlike traditional payment systems offered by major banks.

Users of the Net 1 system may conduct transactions at any time with other cardholders, even in the most-remote areas as long as a portable, offline smart card reader is available.

Besides payments and purchases, companies may use the Net 1 system can be used for banking, healthcare management, international funds transfers, voting and identification.

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