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Australian payment company Zip has announced it will acquire South African Buy-Now Pay-Later (BNPL) fintech service PayFlex.
The acquisition will see Zip grow the Johannesburg-based company and expand it into other African markets.
“The growth of Payflex over the past few years has demonstrated the demand for BNPL in South Africa,” PayFlex founder and CEO, Paul Behrmann, said in a statement.
“Zip’s acquisition will boost the speed and scale of Payflex’s expansion and allow merchants and shoppers to benefit from Zip’s world-class products, platform and global reach.”
Earlier this year, PayFlex secured an undisclosed amount of funding from Zip. At the time, Behrmann said the funding was a vote of confidence in local fintech innovation.
Zip and PayFlex offer digital payment solutions
Launched in 2019, PayFlex offers a BNPL solution for consumers and businesses.
Using the service, customers can pay for goods and services in four equal instalments spread across a six-week period. The instalments are interest-fee and customers only pay a late fee if they miss one.
Customers can pay the instalments using a Mastercard, American Express, or Visa card.
Over 135 000 customers have used the service.
“Shoppers definitely prefer to pay for their purchases in interest-free instalments when given the choice,” Behrmann said.
PayFlex has over 1 000 active merchants and works with brands such as Cotton On, RunwaySale, and Superbalist.
Merchants do not pay setup fees for joining the platform and only pay fees on successful transactions and a monthly service fee.
“The volumes reported by SA merchants mirror global trends, which is driving a massive rise in the number of merchants offering BNPL,” Behrmann added.
Customers can sign up for the service and create accounts on the PayFlex app.
Meanwhile, Zip offers global point-of-sale credit and digital payment services.
The company has operations in Australia, New Zealand, Canada, Mexico, United Kingdom, and the US.
“The shift away from the unfriendly world of credit cards that was the genesis of Zip’s Australian business, and it’s proven to be a global phenomenon,” Managing Director and CEO, Larry Diamond said.
“Millennial and Gen Z customers are consistently demonstrating their appetite for the simpler, fairer payment options that Zip is providing.”
Featured image: Pickawood via Unsplash