Standard Bank backs fintech start-up Float with R206m
Local fintech start-up Float has raised R206m in new funding from Standard Bank to push its growth in SA.
Float is said to be Africa’s first card-linked instalment platform. The company offers shoppers a way to use their credit cards by splitting payments over as many as 24 interest-free, fee-free monthly instalments using their existing credit.
Standard Bank has provided the fintech company with an $11m (R206m) facility to help with the rollout of its card-linked instalment platform, supporting its growth plans for the next four years. The funding has been structured as a revolving credit facility, which the company hopes will ensure long-term security and funding flexibility for its operations.
Float says it is a new payment method “that encourages responsible credit card usage and at the same time helps merchants to grow their sales”.
The start-up’s proprietary technology lets shoppers buy now and pay in monthly instalments using the available limit on their existing Visa or Mastercard credit cards.
The business appears to be a hybrid of the buy-now-pay-later (BNPL) model and the two- to three-year instalments commonplace in SA for decades.
BNPL, which is offered by several online payments companies such as Payflex, PayJustNow and CheckiD, guarantees full payment to the merchant while enabling customers to buy goods and pay small amounts upfront and the balances over time, usually weeks.
Retailers, particularly in electronics and furniture, typically offer options to pay for items through 12-, 24- and 36-month instalments.
Unlike the regular BNPL model, Float says it does not issue consumers with new credit or charge late fees and has no signup, registration or credit check processes.
“Float can be fully configured for merchants in terms of the settlement model, the number of instalments offered to shoppers and the channel — online, instore or via payment link. Float has no cap on order values and average orders are 10 times larger than traditional BNPLs,” the company said.
Float says it already works with almost 7-million preapproved credit cards in SA, meaning there is no signup, registration or credit check process for consumers.
Float has a well-established merchant base, which it expects to “increase exponentially”.
Since November 2021, Float has been adopted by hundreds of merchants including iStore, Samsung, The Pro Shop, CycleLab, Dial-a-Bed and Cape Union Mart.
Alex Forsyth-Thompson, Float’s founder and CEO, said: “Partnering with Standard Bank is a major milestone for our business and is a huge vote of confidence in our model, its value to the payments ecosystem, and the future prospects of our team and business.
“The support from Standard Bank comes at a time when we’re approaching an inflection point in our growth and will be pivotal in fuelling our business as we scale,” he said.