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Description Of Business And Basis Of Presentation (Policy) | 12 Months Ended
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Jun. 30, 2020
Description Of Business And Basis Of Presentation [Abstract] |
Description of Business | Description of Business Net 1 UEPS Technologies, Inc. (“Net1” and collectively with its consolidated subsidiaries, the “Company”) was incorporated in the State of Florida on May 8, 1997. The Company is a provider of financial technology, or fintech, products and services to the u nbanked and underbanked in a number of emerging and developed economies. Its universal electronic payment system (“UEPS”) uses biometrically secure smart cards that operate in real-time but offline, which allows users to enter into transactions at any time with other card holders in even the most remote areas. The Company also develops and provides secure transaction technology solutions and services, and offers transaction processing and financial solutions. The Company’s technology is widely used in South Africa today, where it provides financial services (banking, lending and insurance products), processes debit and credit card payment transactions on behalf of retailers through its EasyPay system, processes value-added services such as bill payments and prepaid electricity for the major bill issuers and local councils in South Africa, and provides mobile telephone top-up transactions for the major South African mobile carriers. The Company has card issuing and acquiring capabilities in Hong Kong and Malta and provides value added payment services to online retailers across Europe through its International Payments Group (“IPG”). The Company leverages its strategic equity investments in Finbond Group Limited (“Finbond”) and Bank Frick & Co. AG (“Bank Frick”) (both regulated banks) to introduce products to new customers and geographies.
Basis of presentation | Basis of presentation The accompanying consolidated financial statements include subsidiaries over which Net1 exercises control and have been prepared in accordance with acc ounting principles generally accepted in the United States of America (“GAAP”).
Impact Of COVID-19 On The Company's Business | Impact of COVID-19 on the Company’s business On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. The Company’s operations were impacted by govern ment-imposed restrictions to contain the spread of the COVID-19 pandemic. Specifically, on March 27, 2020, the South African government imposed certain emergency measures to combat the spread of COVID-19, including implementation of travel bans and closure s of factories, schools, public buildings, and businesses. In addition to limiting movement of employees and access to the Company’s corporate head office and operating branches, the following restrictions directly impacted the Company’s South African oper ations: (i) suspension of new lending and other financial services activities, and (ii) limitations on the amount of banking-related fees that may be charged to customers. These measures continued until May 31, 2020 when the restrictions highlighted above as directly affecting the Company were eased. Nevertheless, as the date of this report, South Africa remains under various lockdown restrictions that affect the broader economy and these affect the Company to the extent they affect activity levels in the South African economy. The broader implications of COVID-19 on the Company’s results of operations and overall financial performance remain uncertain. The COVID-19 pandemic and its adverse effects have become more prevalent in the locations where the Com pany, its customers, suppliers or third-party business partners conduct business. While the Company has not incurred significant disruptions thus far from the COVID-19 outbreak, apart from the two months when loan origination was curtailed, the Company is unable to accurately predict the impact that COVID-19 will have due to numerous uncertainties, including the severity and duration of the outbreak, actions that may be taken by governmental authorities, the impact on the Company’s customers and other facto rs. The Company will continue to evaluate the nature and extent of the impact on its business, consolidated results of operations, and financial condition.
Resolution Of Going Concern Risk | Resolution of going concern risk As previously reported, the Company’s management implemented a number of plans to alleviate the substantial doubt about the Company’s ability to continue as a going concern including the disposal of its March 2020 Korean business unit (refer to Note 3) and its April 2020 sale of its remaining interest in DN Invest Proprietary Limited (“DNI”) (refer to Note 10). The cash received from the disposal of its Korean business unit in March 2020 resulted in the resolution of the going concern risk. T he Company’s management has determined that there are no conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after these consolidated financial statem ents are issued as the Company believes it has sufficient cash reserves.
Restatement Of Financial Statements | 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (continued) Restatement of financial statements Related to DNI discontinued operations presentation Subsequent t o the issuance of the Company’s Annual Report on Form 10-K for the year ended June 30, 2019 and its Quarterly Reports on Form 10-Q for the three months ended September 30, 2019 and the three and nine months ended March 31, 2019, it determined that its pres entation of the discontinued operations of DNI in the consolidated statements of operations included in those filings was incorrect. In these previous filings, the gross amounts of DNI’s operations upon classification as a discontinued operation remained i n the consolidated statements of operations which totalled to net (loss) income. Two captioned lines below net (loss) income were presented to show the composition of the net (loss) income between continuing and discontinued operations and the details of a mounts relating to DNI’s discontinued operations were separately disclosed in a note. The correct presentation removes the gross amounts of a discontinued operation from the consolidated statements of operations, which totals to the net (loss) income from continuing operations before presenting net income from discontinued operations and then totalling to net (loss) income. The Company has revised the previous presentations on the consolidated statements of operations for the years ended June 30, 2019, an d June 30, 2018, and corrected them in this filing where these amounts are presented as comparative prior period amounts. The impact of these revisions has reduced each of the previously-presented line items in the consolidated statements of operations pre ceding net income by the amounts shown in the note disclosure for DNI’s discontinued operations. The revisions had no effect on previously presented net (loss) income, net (loss) income from continuing operations, net income from discontinued operations or the note disclosures for DNI’s discontinued operations, excluding the effects of the disposal of Net1 Korea and the error relating to the release of the foreign currency translation reserve on deconsolidation of DNI. Related to error identified – release of entire foreign currency translation reserve on deconsolidation of DNI in March 2019 In May 2020, the Company identified an error during its assessment of the accounting related to the disposal of its remaining interest in DNI in April 2020. The error relates to the misapplication of U.S. GAAP as the Company was required to release the full amount of DNI’s foreign currency translation reserve from accumulated other comprehensive loss to net income when it deconsolidated DNI in March 2019. The Com pany only released a portion of the foreign currency translation reserve related to the sale of 17% of DNI in March 2019, refer to Note 3, and should have released an additional $4.0 million in March 2019. During the three months ended June 30, 2 019, the Company also sold an additional interest in DNI, refer to Note 3, and released a portion ($0.8 million) of the $4.0 million during this period. Therefore, the error as of June 30, 2019, was $3.2 million. The error impacts the Company’s r eported results and the Company has restated its financial statements for the year ended June 30, 2019 to correct for the error. Related to Finbond error reported in its fiscal 2020 annual report On May 29, 20 20, Finbond released its February 20 20 summarized annual results and announced that it had identified a number of error s in its previously issued audited financial statements and had restated those audited financial statements. The Finbond restatement impacts the Comp any’s reported results and the Company has restated its 201 9 and 201 8 financial statements to correct for the Finbond restatement. The errors identified by Finbond relate to (i) an ageing issue within one of its subsidiary’s loan management system, which p rompted a broader review of its management systems and which further resulted in the identification of a lending book that was incorrectly recognized; (ii) the impairment of goodwill following the identification of errors in (i); and (iii) the identificati on of certain liabilities that should have been recognized in prior periods.

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