The need to expand into the African market as part of its global expansion agenda has led to the acquisition of South African buy now pay later fintech startup Payflex by Australia Securities Exchange (ASX)-listed Zip. Payflex was founded in 2018 with the objective to help consumers to shop now and pay later, interest-free. It launched with in 2019 and is now offered at over 1,000 online merchants.

Zip, for its part, is a leading player in the digital retail finance and payments industry. The company offers point-of-sale credit and digital payment services to the retail, home, health, automotive and travel industries.

With a presence in 12 markets across five continents, Zip plans to grow the South African business and expand into other African markets with sizable underbanked, digitally savvy populations that will benefit from innovative payment solutions. With that in mind, it has announced its intention to fully acquire Payflex.

“The growth of Payflex over the past few years has demonstrated the demand for buy now, pay later in South Africa. 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. It is also a significant vote of confidence in the all-South African Payflex team, which will remain unchanged and focused on growing the business,” said Paul Behrmann, founder and chief executive officer (CEO) of Payflex.

Larry Diamond, Zip managing director and CEO, said the last year had been “truly transformational” for Zip as it continued to deliver, despite the most exceptional global economic conditions.

“We started the year with a clear strategy for global expansion, and we have seen record growth, ending the year with US$5.8 billion in total transaction volume, and more than 7.3 million customers and 51,000 merchants around the world,” he said.

“The shift away from the unfriendly world of credit cards that was the genesis of Zip’s Australian business, and its proven to be a global phenomenon. Millennial and Gen Z customers are consistently demonstrating their appetite for the simpler, fairer payment options that Zip is providing. This global play supporting customers and global retailers alike provides a real point of difference as we strive to become the first payment choice and a trusted and innovative, global payments brand.”

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