FlexPay Founder Richard Machomba on an Alternative to Credit

Low disposable incomes limit the vast majority of Africans from purchasing essential goods and services outright. Additionally, consumers are being pushed toward the booming “buy now, pay later” (BNPL) credit models in the consumption ecosystem, which is predatory, largely inaccessible, and leads to debt cycles. I recognized this gap and was convinced that customers deserve a credit-free way to buy that promotes responsible spending habits and doesn’t put them into debt traps. We started FlexPay to close the affordability gap by flipping credit around and prioritizing a merchant-embedded, save-to-buy experience that incentivizes people to save for purchases they want, love, and dream of without debt, credit, or fees.

I have four co-founders, and cumulatively, we bring together 30- years of experience in financial services, technology, product management, research, and building high-performing organizations. We have been working together for the greater part of the past eight years. We were classmates as far back as university and high school, indicating a cohesive bond that’s been tested through the pain of creating the FlexPay value proposition.

Our merchant partners use FlexPay to drive sales by tapping into a wider market: customers who would otherwise not be able to afford high-ticket purchases outrightly. FlexPay helps grow their top of the funnel, building long-term relationships with their customers by giving them a savings-based purchasing plan that helps them buy the things they want without credit. On the other hand, customers get cash rewards and benefit from the discounts that come with advance payments from their favorite brands and merchants. If you factor in the merchant discount, customers’ “return” on savings is a lot higher than just keeping money aside in the bank account. Customers also have the option to get contributions toward their purchase from friends and family.

The booming BNPL, credit-driven models are our competitors in the consumption ecosystem. While at first sight it indeed seems a more user-friendly solution than payments via a credit card, in reality it is predatory, expensive, largely inaccessible, and pushes people into debt cycles.

In a counterreaction, FlexPay is flipping the traditional credit and BNPL model around to prioritize saving and paying in advance. We initiated a countermovement called “save now, buy later.” This movement aims to provide the same user-friendly embedded (payment) experience as BNPL but without pushing people into credit. Instead, it incentivizes people to save for something they have seen at a merchant and buy it once the required amount has been saved (so buy it in the future). We allow consumers to save up for purchases from their favorite brands, earn cash rewards along the way, and buy when they’re ready, without debt, interest, or any late fees.

Our goal is to expand our market footprint across Africa, and the raised funds will help us in:

1. Scaling retail vertically where we currently operate. 
2. Expanding into more verticals, namely education and schools fees; hospitality, tourism, and travel; insurance; real estate and rent payments; and maternal health for expectant mothers.
3. And expanding into new markets, namely Nigeria/Uganda/South Africa.

We leverage business-to-business partnerships for our customer acquisition. We partner with trusted brands and merchants in various verticals who offer FlexPay to their customers through our easy-to-use application programming interfaces both online and offline. Our strategy is to partner with payment gateways and marketplaces to take advantage of their large pool of merchants and offer FlexPay as a checkout option. We offer business-to-consumer general co-marketing support to our partners through preferred marketing channels as well.

Our vision is to be the most preferred future “neobank” for the underserved African vast majority, offering alternative financial services to those the rest can’t. Our goal is to build a company with a solid offering to our customers and to have a substantial market share across Africa. When we achieve these specific goals, I believe we will be spoiled for choice with exit outcomes.