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 unique 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 are actually getting 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 should 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 programs, in line with 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 also be an issue, with companies shedding a mean of 5% of their revenues yearly to fraudulent actions that always come up from money transactions like asset misappropriation and monetary misreporting.
Gearing up for launch
But, there are vital tailwinds from a regulatory perspective; for example, Egypt’s apex financial institution, the Central Financial institution of Egypt (CBE), launched initiatives such because the On the spot Cost Community (IPN) to scale back cash-based transactions and encourage digital funds.
A number of fintechs in Egypt, together with Swypex, are leveraging such initiatives to launch needed monetary providers 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, making certain 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 massive companies, enterprises, and publicly listed firms, to grasp what their challenges have been at totally different phases,” mentioned 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 providers that have been a little bit bit archaic, so that they needed to go to the banks loads to signal bodily papers and paperwork to get issues transferring for his or her companies.”
All-in-one monetary administration platform
Mokhtar mentioned Swypex gives companies with an “limitless” variety of company playing cards for his or her workers. The platform allows these companies to set good controls to handle spending, resembling setting totally different limits and specifying utilization permissions for ATM withdrawals and on-line transactions. After transactions, workers can add receipts, invoices and spending particulars, that are consolidated right into a centralized dashboard with built-in information from the federal government’s e-invoicing platform. Along with ERP and accounting software program integrations, Swypex presents 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 degree,” mentioned Tarek Mokhtar, the corporate’s chief product officer.“We additionally categorize all of the bills on the platform to offer profound perception right into a enterprise’s monetary well being and every line merchandise, which is able to assist companies make extra data-driven selections primarily based on the real-time visibility we offer them with.”
Swypex’s competitors within the company card area throughout Africa consists of YC-backed firms like Boya and Bujeti. In Egypt, it’s banks resembling HSBC and Nationwide Financial institution. Mokhtar argues that Swypex is a greater possibility for companies as a result of it permits for extra customization in its choices and gives a broader vary of options and providers, together with limitless card issuance and superior controls. “Our concentrate on issues like person expertise and on the spot controls over these playing cards like blocking them, and having all of that automation in-built, is basically new to the market,” the CEO mentioned.
The two-year-old all-in-one monetary administration platform, which presents companies its first three playing cards without cost, 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 buyers.
It’s vital for a startup simply rising from beta solely after just a few months, particularly in a difficult funding local weather the place traction and income are priorities. However there are good the explanation why it attracted funding even earlier than its official launch: Swypex’s potential to deal with a large market (it’s concentrating on a portion of the cardboard and funds market value 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 world firms like Twitter, PlayStation and Spotify.
“Because the funds area continues to digitize, the chance to offer fashionable fintech merchandise to Egyptian companies has develop into much more essential,” mentioned Richard Kotite, vice chairman at Accel, in a press release. “Ahmad, Tarek and Sasan have noticed a spot out there for a complete B2B answer that addresses lots of the key ache factors companies recurrently face whereas driving a step-change in effectivity. We see an actual alternative for Swypex to develop into a fintech champion throughout the Center East. The group is technically skilled and extremely formidable, and we’re delighted to be becoming a member of them on this journey.”
