South African fintechs Payflex and Merchant Capital launch cash advance solution for small retailers

Two South African fintechs, alternative lender Merchant Capital and buy-it-now-pay-later (BNPL) specialist Payflex, have launched a cash advance solution for small and medium-sized businesses in the retail sector .

Known as FlexiAdvance powered by Merchant Capital, the product is customized and technology backed to enable access to finance within 24 hours of application, with a flexible repayment mechanism based on monthly turnover. Retailers can apply through the Payflex portal and tailor their financing to their individual business needs, without the burden of costly paperwork and documentation.

Ryan Cohen, co-founder and chief relationship officer at Merchant Capital, said the solution would give Payflex merchants quick and easy access to funds to use however they see fit.

Payflex CEO Paul Behrmann said Payflex online merchants achieve up to 30% higher average order values, larger purchases and significant revenue increases by offering Payflex Buy Now Pay Later (BNPL ) as a payment option. “FlexiAdvance is an important added value for our merchants, who can now access flexible financing through the Payflex platform.”

Payflex is a pioneer in the rapidly growing BNPL market in South Africa with over 1,500 merchants. BNPL allows buyers to pay for their online purchases in four equal interest-free installments.

Merchant Capital is an established provider of working capital for SMEs and has helped over 15,000 SMEs with working capital of almost R3 billion over the past nine years.

FlexiAdvance will use Merchant’s Capital’s funding technology, combined with Payflex’s payment technology to provide Payflex’s growing merchant base with a working capital solution. Payflex merchants will have access to both Merchant Capital’s alternative loans to fund their business and Payflex’s BNPL solution to increase sales.

“We are extremely excited about the collaboration with Payflex, as we share the same founding principle of bringing innovative and agile fintech products to the South African market,” said Cohen.

Cohen said the small retail sector was recovering well from the effects of the pandemic, with many SMEs undertaking projects that had been delayed due to the uncertainty caused by Covid-19. “This sentiment bodes well for 2022 with a greater sense of predictability and optimism in the economy,” he said.

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