Homegrown fintech startup Payflex has scored a vote of confidence from an Australian-listed multinational.
Payflex is backed by Zip Co, a buy now pay later player with a market cap of over R55-billion. Paul Behrmann, Payflex CEO and founder, 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 US, 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,” he says.
Payflex’s BNPL model allows customers to shop at over 650 well-known online stores like Cotton-on, Superbalist and The Pro Shop. Payments are split over four interest-free instalments.
The process is simple and quick for customers – the assessment is done in seconds and customers only pay a fee if they miss a scheduled instalment. Payflex accepts any Visa or Mastercard cards (debit, credit or cheque).
Merchants which offer Payflex as a payment option report higher order values of purchases by up to 70%. 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,” says Behrmann.
Merchants pay no setup fees when partnering with Payflex and only pay transaction fees on successful orders.
According to Behrmann, Covid-19 has changed the rules of retail: greater competition, rapidly changing customer expectations, and the emergence of new technologies have caused fundamental changes.
“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 says.
Most leading brands have boosted their online offering over the past year. During that time, Payflex 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 instalments in South Africa has been associated with high-interest charges. But this BNPL solution allows them to plan ahead and make interest-free purchases,” says Behrmann.