SA fintech start-up Payflex receives international funding
Launched in 2019 with Superbalist, Payflex allows consumers to make purchases from over 650 online merchants on the Payflex digital mall, and pay later, interest-free. Payments are split over four interest-free instalments.
The Johannesburg-based start-up has a long-standing partnership with Zip Co, a buy now pay later fintech firm, with a market cap of over R55 billion.
After partnering with ZipCo Australia, which has over 6.4 million customers, Payflex localised the best features of its solutions in the buy now pay later space.
Paul Behrmann, Payflex CEO and founder, says the undisclosed investment and support from Zip Co is a vote of confidence in local fintech innovation and will open more market opportunities for the start-up.
“Although Zip was launched in Australia, it has expanded into the US, Britain and New Zealand. With a leader in the buy now pay later space investing in Payflex from inception, we have the financial muscle to expand our footprint and provide merchants with comfort that the company they are dealing with has solid financial backing,” saysBehrmann.
COVID-19 has fast-tracked the growth of SA’s e-commerce sector, with local online retail expected to pass the R62 billion mark this year, which is almost 4.5 times the 2018 figure of R14 billion, according to Payflex.
Payflex says its buy now pay later process is simple and quick for customers. It entails an assessment, which is done in seconds, and customers only pay a fee if they miss a scheduled instalment.
Merchants that offer Payflex as a payment option report higher order values of purchases by up to 70%, according to the company. They have also seen sales increases of up to 30% and repurchase rates of up to 70%.
“Most importantly for merchants, transactions are settled daily directly into their bank accounts. Once the transaction is approved, the merchant is guaranteed payment, putting an end to the e-commerce problem of credit card chargebacks,” adds Behrmann.
Merchants pay no setup fees when partnering with Payflex and only pay transaction fees on successful orders.
According to Behrmann, COVID-19 has fundamentally changed the rules of retail, with greater competition, rapidly-changing customer expectations and the emergence of new technologies.
“Consumers will continue to demand greater personalisation and convenience, simple payment methods and more control over their finances, so merchants need to ensure online shopping is part of their growth strategy,” he points out.