The Legacy of Serge Belamant and NET1 Technologies

NET1 Technologies is one of the foremost providers of secure and affordable financial transaction channels among un-banked and under-banked populations. The company’s technology runs processes in multiple developing countries, and the technology also is part of the foundation of certain processes in developed countries. What the company does today is the result of more than three decades of innovation by founder Serge Belamant and others at NET1 Technologies.

The Founding of NET1 Technologies

Serge Belamant is a well-known figure in the financial technology world today, but his career had a slightly unorthodox beginning. After discovering a passion for applied mathematics and computer science during university, Belamant transferred schools partway through his degree program. Because of this transfer, he was asked to repeat classes but refused — and never completed his university degree as a result. Despite not having a university degree, Belamant secured a position at 22 years of age and entered the workforce. Belamant’s aptitude with computer programs quickly became apparent, and he rapidly progressed upward through various positions and with various companies. He was eventually hired by Saswitch to lead its IT division, and this is where Belamant’s career as a financial technologist really began to take form.

Developing a New ATM Switch for Saswitch

Saswitch was a company of the Republic of South Africa banks, and the banks were facing a problem created by outdated technology at the time. 

It was the 1980s, and Saswitch’s technology was still running on a Christian Rovsing system that could handle no more than 100 transactions each second. The system also didn’t have built-in automatic redundancy, for it wasn’t able to reconfigure in real-time if something went down. While this system may have been sufficient for the early 1980s, the number of financial transactions occurring during the mid-1980s was exceeding what the system could do.

To address this issue, Belamant created a new ATM switch that Saswitch itself and the RSA banks at large could implement. Unlike the outdated Christian Rovsing system, this new switch was capable of processing many more transactions per second, had built-in parallel processing and ran on fault-tolerant hardware. In short, the system was far more capable and proved reliable even when a part failed.

While developing the new switch was helpful, the switch also had to be implemented across Saswitch’s and RSA banks’ infrastructure. For implementation, Belamant sourced the CPS2000 Stratus computer and secured hardware contracts with European suppliers. The acquired hardware was then installed so that the system could be fully upgraded. A new switching and settlement system had to be developed from scratch in a way that would not require the RSA banks to modify the current interfaces and communications’ protocols they used. The new system was able to monitor throughput restrictions and automatically reconfigures itself by allocating virtual memory, CPU resources, disk space and firing up various tasks to optimise resource utilisation. 

As obvious as installing hardware for a major upgrade like this is, it’s not always easy to do — especially in an underserved country. By overseeing this aspect of the work, Belamant demonstrated that he had the skills necessary to execute in developing countries, in rural regions and among underserved communities. His ability to address supply chain challenges and implementation hurdles have helped NET1 Technologies successfully complete projects in several less-established places.

Founding NET1 Technologies With FTS

After the completion of the Saswitch and RSA new ATM switch project, Belamant struck out on his own in 1989 and founded NET1 Technologies. The company’s unique intellectual property at the time was a universal electronic payment system (UEPS) that Belamant developed, that made use of the Funds Transfer System patent which he invented and these continue to be a foundation of many of the company’s projects even today.

UEPS was initially pitched to the RSA banks as an end application capable of integrating with the banks’ existing national payment system. While some banks did implement the UEPS technology, the banking industry at large was hesitant to purchase the new technology and NET1 Technologies saw slow growth for six years.

Contracting With VISA for COPAC

NET1 Technologies’ first major deal, the deal that put the company on track to reach where it is today, came in 1995 when VISA contracted with NET1 Technologies to develop COPAC. VISA chose NET1 Technologies based largely on the intellectual property that the company owned and the track record Belamant had as an innovative financial technologist. 

The contract was for Belamant to develop a Chip Offline Pre-Authorized Card (COPAC). Once the project was completed, COPAC was integrated into cards as a primary safeguard against fraud and misuse and could operate securely offline. It also served as a way to verify personal identification numbers. The advancement is still incorporated into cards today.

While focusing on this specific project, Belamant moved to the United States and brought NET1 Technologies with him. He and the company relocated back to South Africa upon the contract’s completion, and the company successfully gained a listing on the Johannesburg Stock Exchange after the relocation.

Updating First National Bank’s Grant Payment System

The next major project that NET1 Technologies secured was in 1999 when the company began work on First National Bank of South Africa’s grant payment system. The bank’s Cash Payment Services system had to distribute more than one million social grants, such as social security payments, on a regular basis, and the system was badly outdated. Serge Belamant saw an opportunity here, and NET1 Technologies took over the distribution system.

NET1 Technologies updated the CPS system with the company’s UEPS technology. UEPS made it possible for the system to operate at a faster speed, with greater reliability and with redundancy built in through interoperability. This technology alone effectively revolutionized the payment system, and the effects on South Africa’s people were significant.

Serge Belamant was praised by Stafford Thomas as the Henry Ford of Information Technologies for Belamant’s work on this project. The journalist (and many others) immediately recognized what a social grant payment system that was faster, more secure and more reliable would do for the country’s people.

Growing Internationally With Projects in Multiple Countries

The successful completion of the CPS update and the praise that followed made NET1 Technologies a well-known name within the financial technology sector. The company was no longer an obscure company in South Africa, but this project and the former contract with Visa provided the credentials to secure projects throughout the world.

Over the next few years, NET1 Technologies grew by landing contracts in both African and non-African countries. Some of its most notable projects were in Botswana, Burundi, Ghana, Iraq, Namibia and Russia.

Listing on the NASDAQ Stock Exchange in the United States

As NET1 Technologies took on more projects in different countries, the company grew substantially. Eventually, it was large enough to move toward listing on a more prominent stock exchange than the JSE.

From 2003 to 2005, Serge Belamant primarily focused on getting NET1 Technologies listed on the NASDAQ stock exchange. All of the exchange’s requirements were met within two years, and NET1 Technologies successfully debuted in 2005 with an IPO under the ticker symbol UEPS. It would be difficult to think of a more appropriate ticker symbol than one that reflected the company’s core technology.

With the NASDAQ listing, Belamant became Chief Executive Officer and Chairman of NET1 Technologies, two roles that he held for quite a while. NET1 Technologies reached a market cap of $2 billion at the company’s peak.

Even with its primary listing on the NASDAQ, NET1 Technologies continues to maintain a secondary listing on the JSE. The company’s ticker symbol on the South African exchange is NT1.

Contracting With the SASSA to Make Social Grant Payments

All while NET1 Technologies grew internationally, Serge Belamant continued to maintain close ties with South Africa. In 2012, the South Africa Social Security Administration hired NET1 Technologies to be the administration’s distributor of social security grants throughout the country. Whereas NET1 Technologies’ previous social grant system delivered over one million grants regularly, this network had to deliver more than 10 million social security payments each month.

To reliably and efficiently distribute so many grants each month, the framework used once again had to be updated. For this update, Belamant and NET1 Technologies implemented a tri-fold solution that incorporated variable PINs, morphing and an advanced 1:N Biometric Comparison Engine.

The Variable PIN system was necessary to ensure security at older ATM machines that had only outdated safeguards in place. Replacing all of these machines was cost-prohibitive, so Belamant developed a phone-based PIN system instead. 

When someone used the phone-based variable PIN system, they called into a system that could verify their voice. The system then generated a one-time-only PIN, which could be entered into the ATM for a secure transaction. This system greatly reduced fraud at these older ATMs that could otherwise be outmaneuvered with some basic tactics.

The morphing feature was essential to extend payment systems beyond online infrastructure, and this was an especially important need considering how many of South Africa’s residents lived in remote regions where not everything was connected to the main system.

Morphing made it possible for Visa, MasterCard and EuroPay cards to use UEPS when being inserted into ATMs and POS systems. Even if the cards were offline, security could be maintained through multiple audit trails that the UEPS technology created. The effect for South Africans was that they could conduct various financial transactions, including those related to purchases, loans and interest, at both offline and online locations.

From a financial technology perspective, the morphing feature that Belamant designed together with the independent multiple audit trail was at the forefront of blockchain innovation for the day.

The 1:N engine was needed to improve speed and reliability. The engine ran on a network of interconnected computers that shared information via superfast bus, and the network was able to process upwards of 200 million requests per second. Redundancy was also built in, and the system would automatically reconfigure if any one computer went down.

Through the elimination of fraudulent ghost and duplicate requests, the system ultimately saved the SASSA billions of dollars. This system successfully ran for seven years without a recorded incident.

NET1 Technologies Continues Serving Un-Banked and Under-Banked People

NET1 Technologies continues to have projects in South Africa and many other countries. The company leverages its infrastructure and intellectual property to develop solutions for the un-banked and under-banked of the world, and there is great promise for the future as the developing world becomes more and more integrated with modern banking systems.


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