Playing cards are gaining floor in Egypt, with over 30 million in circulation (pay as you go playing cards, notably, are seeing extra use than debit and bank cards mixed). This surge in card utilization, about 14% within the final 4 years, is primarily as a result of incentives launched by fintech firms and banks, attracting hundreds of thousands of Egyptian shoppers who beforehand relied primarily on money for his or her transactions.
The adoption of company playing cards tells a special story. Companies of all sizes have hesitated to embrace company playing cards due to restricted entry and insufficient spending controls over their utilization.
Historically, banks have been the first suppliers of company playing cards throughout the nation; nevertheless, fintech firms at the moment are coming into the scene to spice up adoption. Swypex, one such fintech that’s providing company playing cards and administration instruments for companies, raised $4 million, which it would use to increase its enterprise and technical capabilities of its platform.
Picture Credit: Swypex
Round 3.8 million companies in Egypt face challenges with sophisticated and inflexible monetary techniques, based on a UNDP report. Like many throughout Africa, these companies are utilizing a number of disconnected strategies to deal with their funds, inflicting inefficiencies. Worker fraud can be an issue, with companies shedding a mean of 5% of their revenues yearly to fraudulent actions that usually come up from money transactions like asset misappropriation and monetary misreporting.
Gearing up for launch
But, there are vital tailwinds from a regulatory perspective; as an illustration, Egypt’s apex financial institution, the Central Financial institution of Egypt (CBE), launched initiatives such because the On the spot Cost Community (IPN) to cut back cash-based transactions and encourage digital funds.
A number of fintechs in Egypt, together with Swypex, are leveraging such initiatives to launch essential monetary companies whereas adhering to the central financial institution’s pointers. CEO Ahmad Mokhtar defined that the startup, based in early 2022 however solely rising from stealth mode now, devoted its first 12 months to buying important licenses, guaranteeing regulatory compliance, and collaborating with cost processors and financial institution sponsors. Swypex then rolled out the beta model to 100 prospects final December.
“We spoke to lots of of various companies, from startups to SMEs to giant firms, enterprises, and publicly listed firms, to grasp what their challenges have been at completely different phases,” stated Mokhtar, who launched the startup with Tarek Mokhtar (CPO) and Sasan Hezarkhani (CTO), on the issue Swypex is tackling. “We realized there have been particular pains shared that haven’t been met for the final decade or two, like companies predominantly utilizing money and shedding visibility over their cash or utilizing banking companies that have been somewhat bit archaic, so that they needed to go to the banks quite a bit to signal bodily papers and paperwork to get issues transferring for his or her companies.”
All-in-one monetary administration platform
Mokhtar stated Swypex supplies companies with an “limitless” variety of company playing cards for his or her staff. The platform permits these companies to set sensible controls to handle spending, akin to setting completely different limits and specifying utilization permissions for ATM withdrawals and on-line transactions. After transactions, staff can add receipts, invoices and spending particulars, that are consolidated right into a centralized dashboard with built-in knowledge from the federal government’s e-invoicing platform. Along with ERP and accounting software program integrations, Swypex provides companies a streamlined and complete overview of all bills and spending in a single location.
“Companies utilizing our platform can see analytics across the distribution of spend on every division, service provider, particular person and class stage,” stated Tarek Mokhtar, the corporate’s chief product officer.“We additionally categorize all of the bills on the platform to provide profound perception right into a enterprise’s monetary well being and every line merchandise, which can assist companies make extra data-driven selections based mostly on the real-time visibility we offer them with.”
Swypex’s competitors within the company card house throughout Africa contains YC-backed firms like Boya and Bujeti. In Egypt, it’s banks akin to HSBC and Nationwide Financial institution. Mokhtar argues that Swypex is a greater choice for companies as a result of it permits for extra customization in its choices and supplies a broader vary of options and companies, together with limitless card issuance and superior controls. “Our give attention to issues like consumer expertise and instantaneous controls over these playing cards like blocking them, and having all of that automation inbuilt, is basically new to the market,” the CEO stated.
The two-year-old all-in-one monetary administration platform, which provides companies its first three playing cards without spending a dime, generates income from interchange charges, floats and FX markups.
Company card surge in coming years?
Accel, the storied enterprise capital agency making its first funding throughout the MENA area (although it has backed an African cash switch app), led the $4 million seed spherical in Swypex. Traders who participated within the spherical included Basis Ventures, The Raba Partnership, and different angel traders.
It’s vital for a startup simply rising from beta solely after a couple of months, particularly in a difficult funding local weather the place traction and income are priorities. However there are good the reason why it attracted funding even earlier than its official launch: Swypex’s potential to handle a large market (it’s focusing on a portion of the cardboard and funds market price over $10 billion and anticipated to develop at a ten% CAGR over the following three years), as highlighted by Mokhtar, together with the founders’ backgrounds in creating merchandise at scale for international firms like Twitter, PlayStation and Spotify.
“Because the funds house continues to digitize, the chance to offer trendy fintech merchandise to Egyptian companies has grow to be much more essential,” stated Richard Kotite, vp at Accel, in a press release. “Ahmad, Tarek and Sasan have noticed a niche available in the market for a complete B2B resolution that addresses lots of the key ache factors companies commonly face whereas driving a step-change in effectivity. We see an actual alternative for Swypex to grow to be a fintech champion throughout the Center East. The crew is technically skilled and extremely bold, and we’re delighted to be becoming a member of them on this journey.”
