Introduction:
Card usage in Egypt has been on the rise, with over 30 million cards in circulation. This surge can be attributed to the incentives introduced by fintech companies and banks, which have attracted millions of Egyptian consumers who previously relied on cash for their transactions. However, the adoption of corporate cards among businesses has been slower due to limited access and inadequate spending controls.
Addressing Challenges Faced by Businesses:
According to a UNDP report, around 3.8 million businesses in Egypt struggle with complicated and rigid financial systems. These businesses often use multiple disconnected methods to handle their finances, leading to inefficiencies. Employee fraud is also a concern, with businesses losing an average of 5% of their revenues annually due to fraudulent activities that primarily arise from cash transactions.
The Role of Fintech Companies:
While traditional banks have been the primary providers of corporate cards in Egypt, fintech companies are now entering the scene to boost adoption. Swypex, a fintech startup, recently raised $4 million to expand its business and technical capabilities. The company offers corporate cards and management tools for businesses, aiming to address the challenges faced by businesses in Egypt’s financial ecosystem.
Leveraging Regulatory Initiatives:
Egypt’s Central Bank has launched initiatives such as the Instant Payment Network (IPN) to reduce cash-based transactions and encourage digital payments. Fintech companies like Swypex are leveraging these initiatives to launch necessary financial services while adhering to the central bank’s guidelines. Swypex spent its first year acquiring essential licenses, ensuring regulatory compliance, and collaborating with payment processors and bank sponsors before rolling out its beta version to 100 customers.
The All-in-One Financial Management Platform:
Swypex provides businesses with an “unlimited” number of corporate cards for their employees. The platform allows businesses to set smart controls for managing spending, such as different limits and usage permissions for ATM withdrawals and online transactions. Employees can upload receipts, invoices, and spending details, which are consolidated into a centralized dashboard. The platform also offers integrations with ERP and accounting software, providing businesses with a comprehensive overview of all expenses and spending in one location.
Differentiating Factors:
Swypex faces competition from other players in Africa’s corporate card space, including YC-backed companies like Boya and Bujeti. In Egypt, traditional banks like HSBC and National Bank are also offering corporate cards. However, Swypex believes it stands out by offering more customization in its offerings and a broader range of features and services. The company’s focus on user experience, instant controls, and automation sets it apart from the market.
Investment and Growth Potential:
Swypex recently secured a $4 million seed round led by venture capital firm Accel. The investment highlights the startup’s potential to address a sizable market in Egypt, worth over $10 billion in the card and payments industry. The market is expected to grow at a 10% compound annual growth rate (CAGR) over the next three years. The founders’ backgrounds in developing products for global companies like Twitter, PlayStation, and Spotify also contributed to investor confidence in Swypex’s growth potential.
Conclusion:
The surge in card usage in Egypt is primarily driven by the incentives introduced by fintech companies and banks. While businesses have been slower to adopt corporate cards due to limited access and inadequate spending controls, fintech companies like Swypex are entering the market to address these challenges. Leveraging regulatory initiatives and offering an all-in-one financial management platform, Swypex aims to provide businesses with the tools they need for efficient financial operations. With recent investment and its founders’ experience, Swypex is poised for growth and has the potential to become a fintech champion across the Middle East.
