Mashreq, the Dubai lender controlled by the Al Ghurair family, has invested $10 million in UAE-based FinTech start-up Cashew, becoming the latest to tap into a rapidly expanding ‘buy now, pay later’ (BNPL) sector. Cashew offers its services in the UAE and Saudi Arabia — the Arab world’s largest economies — through an app and a web-based platform. As part of the investment, Cashew’s payment platform will be integrated as an option on the acquiring network of Neopay, the payments subsidiary of Mashreq. The lender will also support the start-up to launch in Egypt — the Arab world’s most populous economy — in the last quarter of this year. In March, Mashreq carved out its payments arm into its new division Neopay, to help businesses handle credit and debit card payments amid a pandemic-fueled e-commerce boom.
Mashreq’s investment is part of a larger funding round that involves other investors as well, Cashew said, without disclosing further details. Since its inception, the FinTech start-up has raised nearly $10m. BNPL platforms allow consumers to make purchases without paying the full amount upfront, avoiding the use of credit cards and hefty interest charges. Merchants are still protected through credit risk checks, late fees and blocks on customers who have defaulted. Consumers can choose to split payments into instalments or simply delay them by weeks to months without any hidden fees, while merchants are paid in full upfront. The BNPL concept is gaining in popularity across the world and has been disrupting the payments industry, buoyed by consumers’ fragile personal finances amid the pandemic-induced economic headwinds. Under the partnership, Cashew and Mashreq will offer new products to the market including longer tenure and higher ticket size BNPL options for consumers.