Pepkor is best known for cheap clothes and shoes through Pep and Ackermans. On Wednesday it made a very different kind of move, agreeing to merge its Flash business, the machines that sell airtime, electricity and vouchers in spaza shops, with a payments company called Shop2Shop. The combined business is valued at R21.3 billion, Pepkor is taking control of it, and the goal is to build what it calls South Africa's pre-eminent fintech platform.
The deal, in short
Pepkor is taking a 57.1% controlling stake in the merged company, provisionally called FintechCo. It gets there by paying R1.57 billion in cash for new Shop2Shop shares, money that clears that company's debt, and by folding in the whole of Flash, valued at R10.6 billion. Together the platform would process more than R200 billion a year across the formal and informal economy, and Pepkor plans to list it separately in the medium term. There is one governance wrinkle: CEO Pieter Erasmus holds a pre-existing indirect interest in Shop2Shop that becomes an indirect 13.2% of the merged business, worth about R2.8 billion. Pepkor says he recused himself, and because his stake sits below the JSE's threshold, no shareholder vote is required; the deal still needs regulatory approval.
Why a retailer wants this
The target is the part of the economy the banks have always struggled to reach. South Africa's informal traders move an estimated R1 trillion a year, mostly in cash, and Flash already reaches 176,000 of them. That arm is already paying its way: Pepkor's standalone informal-market platform made R562 million in operating profit in the first half of 2026, up 23.5% on the prior half. Shop2Shop brings the faster-growing half of the story: its revenue has compounded at 28% a year over three years, against Flash's 9%. As Shop2Shop chief executive Peter Berry put it, "With Flash, we are able to deepen our offering and scale, and position a proven fintech platform in South Africa".
Whether a clothing retailer can build South Africa's leading payments platform is the real question now, and the answer will play out long after the ink has dried.
