The South African fintech market is worth over $1 billion today and is projected to hit nearly $4.3 billion by 2034, growing at a blistering 15.85% compound annual rate. But despite that aggregate growth, the market remains stubbornly fragmented — dozens of specialized players, each owning a slice of the value chain, from point-of-sale infrastructure to digital wallets to cross-border rails. No single platform dominates. No one player can offer an enterprise client a truly end-to-end solution without stitching together multiple vendors.
That fragmentation is expensive. It’s operationally complex. And as of this morning, Araxi Limited — the JSE-listed fintech formerly known as Capital Appreciation — has decided it’s had enough.
In one of the most consequential deals in South African fintech consolidation, Araxi announced it has entered into agreements to acquire 80% of Pay@ Holdings and its affiliate International Payment Holdings Limited for a total consideration of R1 billion (approximately $62.3 million). The transaction, which will be funded through R200 million in cash from Araxi’s existing reserves and R800 million in committed senior debt, will significantly expand Araxi’s payments footprint and create what the companies are calling a “seamless platform that supports faster innovation, broader solutions, and greater long-term value.”
The deal is subject to shareholder approval — it qualifies as a Category 1 transaction under JSE Listings Requirements, meaning it’s large enough to require formal vote — but with Araxi’s management publicly backing the transaction and the strategic logic clear, approval is widely expected. If it closes, the combined entity will control one of the most extensive payment processing networks in Southern Africa, spanning over 9,000 retailer locations, 150,000 mobile POS endpoints, and 15 digital payment platforms across six countries.
For an industry that has long talked about consolidation, this is consolidation.
What Araxi Is Actually Buying
Pay@ is not a household name outside of enterprise and institutional circles, but within those circles, it’s a known quantity. Founded in 2007, the company has spent nearly two decades building what it describes as an end-to-end provider of integrated B2B payments solutions with B2C capabilities. Its secure, multi-product platform consolidates a range of payment options into a single solution and boasts a 99.99% efficacy rate — a metric that matters enormously when you’re processing payments for banks, telcos, pay-TV operators, money remittance services, insurance companies, and public-sector organizations.
The company operates across South Africa, Namibia, Botswana, Zimbabwe, Eswatini, and Lesotho. Over the past 12 months, it processed more than R60 billion in transaction value and has maintained a compound annual revenue growth rate of 22% over the last three years. For the 12 months ending February 28, 2025, Pay@ generated revenue of R271.2 million (up 26.5%), EBITDA of R130.2 million (up 30.3%), and net profit of R91.3 million (up 34.2%).
Those are not the financials of a speculative growth-stage startup bleeding cash to acquire users. Pay@ is a profitable, asset-light, cash-generative business with institutional clients, tested infrastructure, and proven ability to scale across multiple regulatory environments. In other words: exactly the kind of business that fits Araxi’s acquisition playbook.
Bradley Sacks, CEO of Araxi, put it succinctly: “This transaction unites two leading participants operating in different areas of the South African payments ecosystem. By leveraging our complementary strengths, we will deliver a powerful, end-to-end fintech proposition for clients and unlock significant value for stakeholders. With no overlapping products, Araxi and Pay@ together create a seamless platform that supports faster innovation, broader solutions, and greater long-term value.”
That “no overlapping products” line is critical. This is not a defensive acquisition to eliminate a competitor. It’s a portfolio expansion play to fill capability gaps and create a genuinely unified offering.
The Strategic Logic: From Fragmentation to Full-Stack
Araxi — which owns African Resonance, Dashpay, and Synthesis — is primarily a payments and software business serving the financial services and retail sectors. Its product portfolio includes payment infrastructure, cloud solutions, and increasingly, AI and agentic implementations. But until now, Araxi’s payments division has lacked the scale and breadth that enterprise clients increasingly demand.
Pay@, by contrast, has built one of the largest independent payment processing channel networks in South Africa. Its 9,000+ retail locations and 150,000 mobile POS endpoints give it physical distribution reach that Araxi doesn’t have. Its integration with banks, telcos, voucher providers, and fintechs gives it institutional relationships across multiple verticals. And its footprint across six Southern African countries gives it the cross-border capability that is becoming table stakes in regional fintech.
The acquisition solves several problems at once. First, it gives Araxi’s existing clients — primarily banks and large enterprises — access to a much wider distribution network without having to integrate with multiple vendors. Second, it allows Araxi to offer Pay@’s institutional clients access to Araxi’s advanced software capabilities, cloud infrastructure, and AI tools, which Pay@ has not historically had in-house. Third, it positions Araxi to compete for larger, more complex deals that require end-to-end payment orchestration — the kind of deals that previously would have gone to multi-vendor consortiums or international players.
Andrew Hardie, CEO of Pay@, framed the deal in similar terms: “We are excited to combine our extensive platform and experience with Araxi’s deep tech skills and digital and cloud expertise. Araxi has proven its bona fides in the areas in which it operates and will provide Pay@ with strategic support to fuel our continued growth. We both have longstanding banking and corporate relationships and this transaction presents an opportunity to build on those.”
The geographic expansion potential is also material. Pay@ already operates in Botswana, Namibia, Zimbabwe, Eswatini, and Lesotho. Araxi has been primarily South Africa-focused. The combined entity can now cross-sell Araxi’s products into Pay@’s existing regional markets and leverage Pay@’s distribution infrastructure to accelerate Araxi’s own regional ambitions.
The Financing Structure: Debt, Not Equity
The R1 billion purchase price will be settled entirely in cash — R200 million from Araxi’s existing cash reserves and R800 million in senior debt that has already been committed. Araxi currently has no material third-party interest-bearing debt, meaning the company is taking on leverage for the first time in a meaningful way.
Post-completion gearing levels are expected to remain “modest and comfortably serviceable through operational cash flows,” according to Araxi’s announcement. That’s credible given Pay@’s strong cash generation — R130.2 million in EBITDA over the past 12 months — which should more than cover debt service obligations.
The decision to use debt rather than equity is notable. It signals that Araxi’s management believes the acquisition will be immediately accretive to earnings and that diluting existing shareholders through a rights issue or private placement would be value-destructive. It also suggests confidence in the combined entity’s ability to generate the cash flow needed to service and eventually pay down the debt.
One additional strategic detail: 40% of Pay@ shares are currently owned by a US private equity firm. The acquisition will result in Pay@ being fully South African-owned, which Araxi highlighted as a benefit. The implication is clear: profits will be reinvested locally, exposure to currency volatility and cross-border regulatory complexity will be reduced, and the shareholder base will be simplified. In a market where capital flight and foreign ownership remain politically sensitive topics, that localization message carries weight.
The Broader Context: South Africa’s Consolidation Moment
The Araxi-Pay@ deal doesn’t exist in a vacuum. It’s part of a broader wave of consolidation and M&A activity reshaping South Africa’s fintech landscape.
According to industry analysis published in January 2026, South Africa’s embedded finance market hit R292 million in 2025 and is projected to reach R3.95 billion by 2030, growing at 7.8% annually. Buy Now, Pay Later reached R815.1 million in 2025 and is expected to nearly double to R1.3 billion by 2030. Card transactions tell an even starker story: South African consumers completed over 118 card transactions per person per year in 2025, with total card volume hitting R2.9 trillion (USD 159 billion) and growing at 10.4% annually.
The digital payments network across Africa expanded by 45% in 2025 alone. And South Africa remains the technological and regulatory anchor driving that expansion across the continent.
But scale requires infrastructure. And infrastructure at this level requires either building it yourself — expensive, slow, risky — or acquiring it. Araxi has chosen to acquire it.
Recent consolidation examples in the South African market include Stitch’s acquisition of ExiPay to merge in-person and online acceptance, and Ozow’s partnership with EBANX for cross-border reach. Globally, strategic acquisitions are reshaping the fintech sector. MFS Africa’s acquisition of U.S.-based Global Technology Partners opened the door for African fintechs to issue virtual cards linked to global networks. Partnerships with Visa, Mastercard, Stripe (via Paystack), and PayPal are accelerating.
The pattern is clear: the era of single-product fintech startups is giving way to an era of platform consolidation. Winners will be the companies that can offer enterprises a unified, interoperable stack spanning payments, data, compliance, and distribution — without requiring clients to manage a dozen vendor relationships.
Araxi’s R1 billion bet on Pay@ is a bet that it can be one of those winners.
What’s Next: Shareholder Vote and Integration
The transaction still requires shareholder approval, and Araxi will distribute a circular to shareholders in due course. Assuming approval, the focus will shift to integration — never a trivial exercise in fintech, where legacy systems, regulatory compliance, and customer migration can derail even the best-planned M&A.
Araxi has emphasized that Pay@’s management team is committed to remaining with the company post-acquisition, which significantly de-risks integration. The two companies’ products are described as “highly complementary with almost no overlap,” which should reduce the internal turf battles and redundancy elimination that often bog down post-merger execution.
The strategic upside is material. By combining Araxi’s software and cloud capabilities with Pay@’s distribution network and institutional relationships, the merged entity should be able to win larger, more complex enterprise deals, expand geographically with lower customer acquisition costs, and cross-sell products across a much larger installed base.
Whether the deal ultimately delivers on that promise will depend on execution. But the strategic logic is sound, the financials are compelling, and the market opportunity — a fragmented, fast-growing Southern African fintech ecosystem in desperate need of consolidation — is real.
For Araxi, this is not just an acquisition. It’s a statement of intent: the future of South African fintech belongs to platforms, not point solutions. And Araxi just spent R1 billion to make sure it’s one of them.
