South African fintech Happy Pay raises $5m to scale zero-interest BNPL

Cape Town-based buy now, pay later startup Happy Pay has raised $5 million in seed funding to expand its merchant-funded payment platform, which charges consumers no interest or fees.

Partech, a Paris-headquartered venture capital firm, led the round, with participation from Futuregrowth Asset Management, 4Di Capital, E4E Africa, Equitable Ventures, Summit Deals, the University Technology Fund, and Felix Strategic Investments.

Happy Pay operates what it describes as an “ad-subsidised payments network”, a model in which merchants and brands, rather than consumers, bear the cost of instalment payments.

The platform has over 600,000 registered users and earns revenue by connecting retailers with shoppers through targeted offers and flexible payment options.

Unlike traditional credit providers, which generate revenue through interest, fees, or revolving balances, Happy Pay charges merchants only when transactions are completed, not for impressions or clicks.

How Happy Pay’s platform helps to create consumer flexibility

Happy Pay uses an AI-driven engine to match merchants with shoppers based on behavioural signals, transaction data, and affordability insights. Offers are surfaced within its own app as well as through partner apps and other digital channels, with instalment payments built into the checkout process.

Retailers pay because offering flexible payment options and targeted ads can lead to more sales and larger purchases. Happy Pay presents this as a win-win: consumers receive interest-free credit, and merchants gain more sales and acquire new customers.

“Our mission is simple: to make cash-flow management free for consumers,” said Wesley Billett, co-founder and CEO of Happy Pay.

“If we can connect the right product to the right person at the right moment and remove payment friction, commerce itself can fund the flexibility. That allows us to deliver instalment payments without charging consumers interest.” He added.

Billett explained that the company’s growth reflects a broader trend toward financial tools that offer flexibility without the burden of debt. He noted, “Traditional credit in South Africa is costly. The average person with credit spends about 28% of their income on paying off debt.”

Why investors backed Happy Pay’s model

Matthieu Marchand, a principal at Partech, said the firm evaluated BNPL companies across Africa, Europe, and the US before backing Happy Pay.

“BNPL only makes sense when it delivers real affordability for consumers whilst helping merchants improve conversion, grow their client base, build loyalty, and reduce acquisition costs,” Marchand said.

The fresh capital will be used to expand merchant partnerships, grow distribution across digital and physical channels, and continue developing the platform’s AI-driven recommendations engine.

South Africa’s BNPL market is growing, with Shoprite entering the space. Happy Pay stands out by charging merchants, not consumers, which may be sustainable if merchants want to attract more customers.

Happy Pay’s merchant-funded model’s profitability and scalability are unproven, but its $5 million investment from Partech signals confidence in commerce’s ability to fund consumer flexibility without interest.

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