In Egypt, the use of cards has increased significantly, with more than 30 million in circulation. Interestingly, prepaid cards are becoming more popular than debit and credit cards combined. Fintech companies and banks have offered enticing incentives, contributing to the significant increase in card usage, which has grown by approximately 14% over the past four years. These incentives have successfully attracted a large number of Egyptian consumers who were previously reliant on cash for their transactions.
The use of corporate cards reveals a contrasting narrative. Many businesses, regardless of their size, have been hesitant to adopt corporate cards due to the limited access and insufficient spending controls associated with their usage.
In recent years, there has been a shift in the corporate card landscape as fintech companies have started to make their mark alongside traditional banks. This increased competition is driving a greater adoption of corporate cards across the country. Swypex, a fintech company, recently secured $4 million in funding. The company will utilize this investment to enhance its platform and expand its business and technical capabilities.
According to a report by the UNDP, approximately 3.8 million businesses in Egypt are grappling with complex and inflexible financial systems. Similar to many businesses across Africa, these companies are utilizing various disjointed methods to manage their finances, resulting in inefficiencies. Employee fraud is a significant issue that businesses face, resulting in an average loss of 5% of their revenues each year. These fraudulent activities typically stem from cash transactions, such as asset misappropriation and financial misreporting.
Preparing for the launch
However, there are notable regulatory advantages to consider. For example, Egypt’s Central Bank of Egypt (CBE) has introduced initiatives like the Instant Payment Network (IPN) to decrease reliance on cash transactions and promote digital payments.
Several fintechs in Egypt, such as Swypex, are utilizing these initiatives to introduce essential financial services while following the guidelines set by the central bank. The CEO, Ahmad Mokhtar, elaborated on the startup’s journey. Founded in early 2022, the company focused its initial year on obtaining crucial licenses, ensuring compliance with regulations, and establishing partnerships with payment processors and bank sponsors. Swypex then released the beta version to 100 customers in December.
“We interviewed a wide range of businesses, including startups, SMEs, large corporations, enterprises, and publicly listed companies, to gain insights into the various challenges they face at different stages,” said Mokhtar, one of the founders of the startup Swypex, along with Tarek Mokhtar (CPO) and Sasan Hezarkhani (CTO). There are certain challenges that many businesses have been facing for quite some time now. These include relying heavily on cash transactions and lacking clarity on their financial status. Additionally, the outdated banking services they were using required frequent visits to the bank and physical paperwork to get things done.
A comprehensive platform for managing all your financial needs
Mokhtar mentioned that Swypex offers businesses an “unlimited” quantity of corporate cards for their employees. The platform empowers these businesses to establish intelligent controls for managing spending. This includes the ability to set various limits and define specific usage permissions for ATM withdrawals and online transactions. Employees can effortlessly upload receipts, invoices, and spending details after completing transactions. A centralized dashboard compiles and organizes these documents, incorporating data from the government’s e-invoicing platform. Swypex provides businesses with a centralized platform that provides a complete and organized view of all expenses and expenditures.
“Our platform provides businesses with comprehensive analytics on the distribution of spend across departments, merchants, individuals, and categories,” stated Tarek Mokhtar, the company’s chief product officer. Our platform thoroughly organizes and classifies all expenses, offering valuable insights into a business’s financial well-being. By providing real-time visibility into each line item, we empower businesses to make informed decisions based on data.
Swypex faces competition in the corporate card space across Africa from YC-backed companies such as Boya and Bujeti. In Egypt, the prominent banks are HSBC and National Bank. In Mokhtar’s view, Swypex emerges as a superior choice for businesses due to its extensive customization options and wide array of features and services. These include unlimited card issuance and advanced controls, which enhance its appeal. “The CEO highlighted the innovative approach of prioritizing user experience and providing instant controls over these cards, such as blocking them, with seamless automation integrated into the system,” the CEO stated.
Designed for businesses, the all-in-one financial management platform offers its first three cards at no cost. It generates revenue through interchange fees, floats, and FX markups.
In the coming years, will there be a surge in corporate card usage?
Accel, a renowned venture capital firm, has made its initial foray into the MENA region’s fintech sector by leading a $4 million seed round in Swypex. This comes after their previous investment in an African money-transfer app. Investors who took part in the round included Foundation Ventures, The Raba Partnership, and other angel investors.
It’s crucial for a startup that has recently come out of beta in just a few months, particularly in a difficult funding environment where gaining traction and generating revenue are top priorities. There are compelling reasons why it garnered investment prior to its official launch. Swypex has the potential to tap into a significant market segment valued at over $10 billion, which is projected to grow at a 10% CAGR in the next three years. Mokhtar emphasizes that the founders’ extensive experience in creating large-scale products for renowned companies like Twitter, PlayStation, and Spotify further bolsters this potential.
“The digitization of the payments space has made it increasingly crucial to offer modern fintech products to businesses in Egypt,” stated Richard Kotite, the vice president at Accel. Ahmad, Tarek, and Sasan have identified an opportunity in the market for a comprehensive B2B solution that effectively addresses common challenges faced by businesses and significantly improves efficiency. We believe that Swypex has the potential to establish itself as a leading fintech player in the Middle East. The team has a strong technical background and a great drive for success, and we are thrilled to be a part of their exciting journey.
