Pepkor Holdings, a leading South African retail platform, is expanding its presence in South Africa’s fast-growing fintech sector after agreeing to combine its Flash business with Shop2Shop in a transaction valued at R12.17 billion ($738.5 million), creating one of the country’s largest merchant commerce and financial technology platforms.

The combined business, to be known as FintechCo, will serve both South Africa’s formal and informal economies, with annual transaction throughput exceeding R60 billion ($3.4 billion).

The deal also positions Pepkor to benefit from rising demand for digital payments, merchant services and financial products among millions of consumers and small businesses shifting away from cash.

Pepkor said it also intends to pursue a separate stock market listing of FintechCo over the medium term, creating additional value for shareholders.

Pepkor secures controlling stake

As part of the transaction, Pepkor will acquire a 57.1 percent controlling stake in FintechCo through a R1.57 billion ($95.26 million) cash investment for newly issued Shop2Shop shares while contributing its entire interest in Flash, valued at R10.6 billion ($642 million).

The agreement values the combined fintech business at approximately R21.3 billion ($1.2 billion). “This transaction is transformative for Pepkor and represents the logical next step in expanding the group’s participation across the informal market value chain,” Chief Commercial Officer Garth Napier said.

The merger combines Shop2Shop’s merchant payment infrastructure with Flash’s digital commerce platform, creating an integrated ecosystem offering payment processing, cash management, digital products and financial services.

Flash and Shop2Shop strengthen merchant ecosystem

Pepkor operates more than 6,500 stores across Africa and Brazil through brands including Pep, Ackermans and other value-focused retail chains. Beyond retail, the company has built a significant financial services business through subsidiaries including Flash and Capfin, providing prepaid electricity, airtime, digital vouchers and financial products to underserved consumers.

Flash supports more than 175,000 informal traders and spaza shops, enabling merchants to sell airtime, data, electricity vouchers, lottery products and payment services while processing roughly R60 billion ($3.6 billion) in annual consumer transactions.

Shop2Shop complements that network by providing smartphone applications and Tap2Pay devices that help merchants accept digital payments, settle supplier invoices and access banking and bill-payment services.

Through partnerships with payment aggregators, including Pay@, the platform connects merchants with hundreds of billers, extending financial services into township and underserved communities.

Fintech expansion targets South Africa’s informal economy

The combination strengthens Pepkor’s position in one of Africa’s fastest-growing fintech markets as retailers, banks and payment companies accelerate the digitization of commerce.

By integrating Flash’s digital distribution network with Shop2Shop’s merchant payment technology, Pepkor is building a scalable platform designed to drive financial inclusion, expand merchant services and capture long-term growth across South Africa’s informal economy.