Cards are gaining ground in Egypt, with over 30 million in circulation (prepaid cards, in particular, are used more than debit and credit cards combined). This increase in card usage, around 14% over the past four years, is mainly due to incentives introduced by fintech companies and banks, attracting millions of Egyptian consumers who previously relied mainly on cash for their transactions.
Corporate card adoption tells a different story. Businesses of all sizes have been reluctant to embrace corporate cards due to limited access and poor spending controls on their use.
Traditionally, banks have been the main providers of corporate cards across the country. However, fintech companies are now entering the scene to boost adoption. Swypexone such fintech that offers corporate cards and management tools for businesses, has raised $4 million, which it will use to expand the business and technical capabilities of its platform.
Image Credits: Swypex
About 3.8 million businesses in Egypt face challenges with complex and rigid financial systems, according to a UNDP report. Like many in Africa, these businesses use multiple disconnected methods to handle their finances, causing inefficiencies. Employee fraud is also a problem, with businesses losing an average of 5% of revenue annually to fraudulent activities that often arise from cash transactions, such as misappropriation of assets and incorrect financial reporting.
Preparing for launch
However, there are significant regulatory tailwinds. For example, Egypt’s apex bank, the Central Bank of Egypt (CBE), launched initiatives such as the Instant Payment Network (IPN) to reduce cash-based transactions and encourage digital payments.
Several fintechs in Egypt, including Swypex, are leveraging such initiatives to launch needed financial services while adhering to central bank guidelines. CEO Ahmad Mokhtar he explained that the startup, founded in early 2022 but only now emerging from stealth mode, has spent its first year obtaining key licenses, ensuring regulatory compliance and working with payment processors and bank sponsors. Swypex then released the beta version to 100 customers last December.
“We talked to hundreds of different businesses, from startups to SMEs to large corporations, enterprises and public companies, to understand what their challenges were at different stages,” said Mokhtar, who started the startup with Tarek Mokhtar ( CPO) and Sasan Hezarkhani (CTO), about the problem facing Swypex. “We realized that there were common problems that had not been covered in the last decade or two, such as businesses using mostly cash and losing visibility of their money, or using banking services that were a bit archaic, so they had to visit banks a lot to sign physical papers and documents to get things going for their businesses.”
All-in-one financial management platform
Mokhtar said Swypex provides businesses with an “unlimited” number of corporate cards for their employees. The platform enables these businesses to set smart controls to manage spend, such as setting different limits and setting permissions for ATM withdrawals and online transactions. After transactions, employees can upload receipts, invoices and expense details, which are consolidated into a central dashboard with embedded data from the government’s e-invoicing platform. In addition to ERP and accounting software integrations, Swypex offers businesses a streamlined and comprehensive overview of all costs and expenses in a single location.
“Businesses using our platform can see detailed information about the breakdown of spend at each department, merchant, person and category level,” he said. Tarek MokhtarChief Product Officer of the company.“We also log all expenses on the platform to give deep insight into the financial health of a business and each line item, which will help businesses make more data-driven decisions based on real-time visibility that we provide with them.”
Swypex’s competition in the corporate card space across Africa includes YC-backed companies such as Boya and Bujeti. In Egypt, they are banks such as HSBC and National Bank. Mokhtar argues that Swypex is a better choice for businesses because it allows more customization in its offerings and provides a wider range of features and services, including unlimited card issuance and advanced checks. “Our focus on things like the user experience and direct controls on these cards, like blocking and incorporating all this automation, is fundamentally new to the market,” said the CEO.
The 2-year-old all-in-one financial management platform, which offers businesses its first three cards for free, generates revenue from interchange fees, floats and FX markups.
Corporate cards on the rise in the coming years?
Accel, the renowned venture capital firm making its first investment in the MENA region (although it has backed an African money transfer app), led the $4 million seed round in Swypex. Investors participating in the round were Foundation Ventures, The Raba Partnership and other angel investors.
It’s important for a startup just coming out of beta after only a few months, especially in a tough funding climate where traction and revenue are priorities. However, there are good reasons why it attracted investment even before its official launch: Swypex’s ability to address a fairly large market (it targets a part of the value of the card and payment market over $10 billion and expected to grow at a CAGR of 10% over the next three years), Mokhtar highlighted, along with the founders’ backgrounds in developing products at scale for global companies such as Twitter, PlayStation and Spotify.
“As the payments space continues to digitize, the opportunity to provide modern fintech products to Egyptian businesses has become even more important,” Richard Kotite, vice president of Accel, said in a statement. “Ahmad, Tarek and Sasan identified a gap in the market for an end-to-end B2B solution that addresses many of the key pain points that businesses face regularly while driving a step change in efficiency. We see a real opportunity for Swypex to become a fintech champion across the Middle East. The team is technically savvy and very ambitious, and we are delighted to join them on this journey.”
