The Commercial Bank of Dubai (CBD) has approved a debt financing agreement with Dubai-based company Postpay, highlighting how FinTech and traditional banks are expanding the financial products offered in the market.
The strategic partnership with CBD will provide support to Postpay on multiple fronts, including transaction banking, debt financing and e-commerce services, allowing it to focus on growing and supporting its customers and merchant partners, said Postpay in a statement Monday.
The deal with CBD will also help Postpay continue its planned expansion into the United Arab Emirates, Saudi Arabia and other GCC countries.
“This facility provides fuel for our engine and allows us to achieve our ambitious goals for the future,” said Tariq Sheikh, Founder and CEO of Postpay.
The deal is CBD’s latest step in its FinTech partnerships, which recently culminated in the lender establishing a permanent presence in the DIFC Innovation Hub, the region’s largest FinTech ecosystem.
“Partnering with Postpay is in line with our commitment to supporting our customers’ ambitions,” said Bernd van Linder, Managing Director of CBD. “We believe in supporting the growing FinTech ecosystem in the UAE to enhance the entire payments industry with innovative digital solutions such as [buy now, pay later].”
Last year, Postpay closed a $10 million pre-Series A funding round, led by Afterpay, Touch ventures and others, which accelerated the company’s growth.
The buy now, pay later business model, which allows consumers to make online purchases instantly and spread their payments over interest-free installments, has exploded since the start of the Covid-19 pandemic, with consumers being switched to online shopping.
The industry is expected to grow 10 to 15 times by 2025 globally, exceeding $1 trillion in annual gross merchandise volume by some estimates, a report by New York-based data research consultancy CB Insights.
Postpay works with global brands including H&M, Footlocker and Dermalogica, as well as regional names such as Alshaya Group, The Entertainer and Kcal.
The company was founded in 2019 in Dubai and offers shoppers the option of paying in three monthly installments at their partner stores with no interest or fees.
Updated: February 7, 2022, 4:35 p.m.