Pepkor Holdings is merging its fintech subsidiary, Flash, with payment platform Shop2Shop to create a new entity valued at R21.3 billion. The transaction, announced in July 2026, aims to dominate South Africa’s informal retail sector, with Pepkor taking a 57.1% controlling stake and planning a future JSE listing.
In a move that signals a major pivot for one of South Africa’s largest retailers, Pepkor is combining its Flash distribution network with the payment processor Shop2Shop. The resulting business, provisionally dubbed “FintechCo,” is valued at R21.3 billion and is designed to capture the high-volume, low-cost transaction market within the country’s informal economy.
The Economics of the R21.3 Billion Merger
Post-transaction, Pepkor will hold a 57.1% stake, while the remaining equity will be held by Shop2Shop shareholders and management.
Photo: bizcommunity.com
The strategic logic lies in the complementary nature of the two businesses. BusinessTech reports that Shop2Shop brings essential merchant acquiring, payment terminal technology, and cash management services. Together, the platform expects to process more than R200 billion in annual transaction throughput.
Governance and the Role of CEO Pieter Erasmus
The transaction has drawn attention to the involvement of Pepkor CEO Pieter Erasmus, who holds an indirect minority interest in Shop2Shop.
“Appropriate and strict governance processes were maintained throughout the process, including Erasmus’s recusal from all deliberations and decisions.”
Pepkor Holdings, via Moneyweb
Competing for the Informal Economy
“It has long been ignored… mainly because of the expense of servicing high volumes, with low transaction cost but slowly this started to change, with Lesaka the really a big one that put together a lot of pieces and started providing services in this area.”
Photo: TimesLIVE
Kokkie Kooyman, banking and investment analyst, via EWN
Kooyman noted that by combining Flash and Shop2Shop, Pepkor is effectively “outflanking” both traditional banks and competitors like Lesaka Technologies. The merger forces a heating up of competition, as the combined entity now offers a broader, more integrated suite of services to township merchants.
Strategic Objectives and Future Listing
For Pepkor, the merger is a foundational step toward building a digital banking footprint.
Pepkor's R21bn fintech bet and IPO ambitions
“This transaction is transformative for Pepkor and was the logical next step in expanding the Group’s participation across the informal market value chain while extending the reach of our financial services ecosystem and supporting our ambition to build a leading digital bank with a nationwide distribution footprint.”
Garth Napier, Chief Commercial Officer at Pepkor, via TimesLIVE
Shop2Shop founder Peter Berry echoed this sentiment, focusing on the empowerment of small business owners.
“Shop2Shop was founded to bring purpose-built solutions to South Africa’s large and underserved informal merchant market, to empower small business owners. We’ve built a broad product set on a platform engineered for high-volume, low-cost transactions. With Flash, we are able to deepen our offering and scale, and position a proven fintech platform in South Africa.”
Peter Berry, Founder and CEO of Shop2Shop, via IT News Africa
If the merger proceeds, the company plans to pursue a separate listing for “FintechCo” on the JSE in the medium term, providing a liquidity path for minority shareholders.
