FlexPay Technologies is a Kenyan fintech that enables consumers to afford products that would otherwise be out of their reach.
The startup allows customers to buy from partner merchants, reserve products and pay for a period of time, at no additional cost. It initially partnered with a Kenyan retailer but scaled up in 2020 and has grown its merchant network to 600 to date. This number of partner merchants is set to grow further as the startup, which is part of the 2023 Startup Battlefield 200 cohort, expands its “Save Now, Buy Later” offering.
“We want FlexPay to be like an active bank account where customers aren’t paying for retail products, they’re saving and paying for holidays or school fees,” said FlexPay Co-Founder and CEO Richard Muchomba. said The startup is in the process of sealing partnerships that will allow its users to book and pay for flight tickets and hotels.
This is part of its ongoing strategy to retain customers and introduced its initial product dubbed FlexPay Goal for users with set savings ambitions; FlexPay Chama, which enables groups to save together; and Mama Prime, for maternity care savings.
Its customers sign up through the app or its partner merchants (including offline merchants) to start making payments. Online shoppers access FlexPay as a payment option during checkout.
“Offline merchants register customers through USSD and in a way shop owners have become our agents,” said Muchomba, who co-founded the startup with Johnson Gituma (COO).
Customers make an initial deposit through FlexPay and pay the remaining amount within a predetermined period.
“We don’t dictate how many installments customers have to pay or what specific amount to pay, but in the retail industry, most merchants allow payment within three months. Payment times vary by industry; For the travel industry, it can be up to a year,” he said, adding that his success rate is 96%.
FlexPay receives a 5% commission for every product or service sold through its platform. Claiming to have served more than 200,000 customers so far, this number is set to increase with upcoming launches in Uganda and Nigeria.
FlexPay’s “save now, buy later” model is unlike the credit-driven buy now, pay later (BNPL) model that charges interest and requires customers to have a good credit score to qualify.
“This model has traditionally been the reason why people are buying products using FlexPay. We just digitized it. People cannot afford to buy high-ticket items at a time and we think the post-paid model is a good approach for the African market,” said Muchomba.
“Behind the scenes, we are collecting data that we plan to use to create affordable and sustainable financing products.”
FlexPay has raised $785,000 so far, with several investors including Acacia Group (formerly Cairo Angels Syndicate Fund), LoftyInc, Expert Dojo, Google Black Founders Fund and Renew Capital.