The Egyptian fintech, Flash, which provides cashless payment solutions for consumers and businesses through a scan-and-pay service, has raised $6 million in seed funding led by Addition. Addition is the venture capital firm headed by former Tiger Global executive Lee Fixel.
In Egypt, platforms like Fawry and InstaPay, tapped into the apex bank’s policies to reduce cash dependencies. This has been responsible for the spread of e-wallets and cards in the North African country, where 64% of Egyptians increased their adoption of digital payments solutions last year.
While e-wallets and cards dominate the digital payments landscape, Egypt’s apex bank is keen to promote another method: contactless payments, after recently issuing regulations governing payment card tokenization on mobile apps.
Flash, has obtained approval from the Central Bank of Egypt to operate as a technical payment aggregator. This will allow customers to make purchase with their phones by adding any existing bank card or digital wallet to the app and scanning a QR code that is presented by a business, in-store or on-delivery.
Flash co-founder and CEO, Erik Gordon, said they are eliminating the need for cash or carrying cards for consumers and the POS machine on the merchant side. This way, businesses can accept payments without needing the tasking technical integration typically encountered with expensive NFC-enabled point-of-sale (POS) systems.
He added that, with QR codes, businesses don’t have to worry about integration, setup and maintenance fees and it’s low tech, so anyone with a camera on their phone can pay that way. The inefficiencies that exist in a very cash-based society such as Egypt are something Gordon noticed during his time at Uber as head of marketplace for the North African country.
According to the chief executive, 90% of Uber’s rides were paid in cash. When collected from the drivers at the end of each day, this turned into piles of money being counted in warehouses, which led to fraud and theft.
However, this new platform strengthens commitment to developing the cashless ecosystem, introducing new products, and diversifying digital payment portfolio, which includes automated bill payments and behavioral insights into spending.