SouthAfrican fintech holding company Adumo announced this week that it has invested in the alternative payments platform SwitchPay with an undisclosed amount.

Adumo, based in Sandton, has aggregated multiple South African payments providers, including Sureswipe, Ikhokha, Innvervation, and now SwitchPay.

Adumo CEO Paul Kent said in a company blog post that the investment comes as consumer interest in new payment options is at an all-time high.

“The impact of the pandemic and the rise of new, more convenient and value-adding payment options is revolutionising how South Africans purchase goods and services,” says Kent.

“The team at SwitchPay has built a world-class suite of alternative payment solutions that brings new forms of value to consumers and retailers alike. We look forward to working with the team as we bring convenient new payments within reach of all South Africans.”

So what, exactly, is SwitchPay? It’s a digital platform that lets retailers offer their customers alternative payment methods, both in-store and online. These include purpose-based lending, customised subscription models, and layby.

The idea of alternative payments is to give more options to consumers, thus creating more opportunities for local merchants to make sales, and increase basket size.

The layby option is interesting in an era where buy now, pay later payment models are becoming ubiquitous around the region, and the globe. Layby is an old-school payment method where consumers pay for a good in advance with installments and take possession when full payment is completed. SwitchPay now allows retailers and consumers to handle layby transactions digitally.

Buy now, pay later has flipped layby on its head, allowing consumers to take possession of the goods immediately and pay it back over time, usually in three or four installments.

Adumo is also active in the buy now, pay later space. In November, Adumo partnered with digital bank TymeBank to offer MoreTyme, a BNPL offering targeting SMEs. BNPL is often seen as a solution for major retailers. MoreTyme’s goal is to give SMEs the chance to increase revenues with a BNPL offering at the point of sale.

MoreTyme allows consumers to pay for their purchases in three equal, interest-free installments.

Most BNPL platforms tout the payment model’s ability to increase average order values.