South Africa's informal economy just got a major new fintech player. Pepkor Holdings has announced the merger of its wholly owned fintech subsidiary, Flash, with payments network Shop2Shop — creating a combined platform with annual transaction throughput exceeding R200 billion.
The deal implies a total equity valuation of approximately R21.3 billion. Once completed, Pepkor will hold a controlling 57.1% stake in the new entity, to be known as FintechCo.
Two Businesses, One Platform
The logic behind the merger is straightforward: Flash and Shop2Shop operate at opposite ends of the same value chain. Shop2Shop brings merchant acquiring and payments infrastructure with strong upstream capabilities, while Flash has built a downstream platform covering value-added services, digital products, and financial services.
Together, FintechCo will offer integrated solutions spanning cash handling, payments, merchant services, and financial products — all aimed squarely at South Africa's fast-growing informal trader market.
Peter Berry, Founder and CEO of Shop2Shop, framed the deal as a direct extension of the company's founding mission.
"Shop2Shop was founded to deliver purpose-built solutions for South Africa's underserved informal merchant market. By combining with Flash, we can deepen our product offering, expand our scale and strengthen our position as a leading fintech platform."
Strategic Weight Behind the Numbers
To close the transaction, Pepkor will invest R1.57 billion through a cash subscription for new Shop2Shop shares, and will contribute its entire shareholding in Flash — valued at R10.6 billion. The deal remains subject to regulatory and competition authority approvals.
For Pepkor, this is not just a financial play. The group has been steadily building out its Informal Market Platform segment, and this merger accelerates that strategy considerably. The company says the combination will diversify earnings, drive growth, and create shareholder value — with a planned future listing of FintechCo already on the horizon.
Garth Napier, Chief Commercial Officer of Pepkor, called it a defining moment for the group.
"This transaction is transformative for Pepkor and represents the logical next step in expanding our participation across the informal market value chain. It extends the reach of our financial services ecosystem while supporting our ambition to build a leading digital bank with a nationwide distribution footprint."
Why the Informal Economy Is the Battleground
South Africa's informal economy is expanding on the back of resilient consumer demand and increasing merchant participation — and that is drawing serious capital. Digital financial services providers have been racing to plant roots in this segment, recognising that informal traders have historically been underserved by traditional banking infrastructure.
Pepkor's move to merge two complementary platforms rather than build from scratch reflects a broader shift across African fintech, where consolidation is increasingly the fastest path to scale. The planned listing of FintechCo will be closely watched as a signal of how the market values access to informal merchant networks at this size. Similar fintech consolidation trends are playing out across the continent, but few deals have come with this level of transaction volume attached.
The transaction was announced on 22 July 2026. No completion timeline has been disclosed pending regulatory clearance.