SA Fintech Startup Payflex Secures Undisclosed Amount of Funding

South African-based fintech startup Payflex just recently launching a new offering that offers an online payment gateway solution to South African merchants that allows shoppers to pay over 6 weeks, interest-free has secured an undisclosed amount of funding from Australian-listed multinational Zip Co Limited a buy now pay later player with a market cap of over R55 billion. 

In a press release, Paul Behrmann, CEO, and founder of Payflex says the investment and support by Zip Co is a vote of confidence in local fintech innovation and the market opportunities inherent in South Africa. 

“Although Zip was launched in Australia, it has expanded into the USA, Britain, and New Zealand. With a leader in the buy now pay later (BNPL) 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.”

Payflex buy now pay later feature

The fintech’s buy no pay later model enables customers to shop at over 650 well-known online stores such as  Cotton-on, Superbalist, and The Pro Shop. Payments are split over four interest-free installments. For example, if a consumer purchases a watch for R 1000, the first payment upfront will be R250 and the three additional payments will be R250 every two weeks for a period of six weeks. 

The platform has been developed to inform users on how and when payments are required, creating a transparent buy now pay later system with consumers. If a customer misses a scheduled payment, a fee will be charged and the fintech has ensured that the process is simple and quick for customers. The Covid-19 pandemic has caused a boost in the eCommerce sector and Payflex claims that it has more than quadrupled year-on-year customer sign-ups.

“South Africans need a payment solution that does not rely on costly credit and is simple to use. Traditionally, paying via installments in South Africa has been associated with high-interest charges. But this BNPL solution allows them to plan ahead and make interest-free purchases,” adds Behrmann.

Benefiting retailers

According to reports, merchants that offer Payflex as a payment option have reported higher order values of up to 70% and an overall sales increase of up to 30%. In addition, the purchase rate has increased by 70% for merchants that offer Payflex as a flexible payment option to consumers. Merchants pay no setup fees when partnering with Payflex and only pay transaction fees on successful orders. 

“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.