What began as a lucrative five-year partnership between Naivas and fintech firm FlexPay has ended in a bitter commercial dispute, competing fraud allegations, police investigations and the arrest of two FlexPay executives.
The partnership began in February 2021, allowing Naivas customers to buy goods on instalments through FlexPay. The arrangement was initially meant to run until February 2028, with FlexPay required to remit customer payments to Naivas by the following day, less a 5 percent discount. Naivas employees involved in the sales also received a 1 percent incentive.
According to FlexPay’s court and prosecutorial filings, the platform processed more than Sh3 billion in transactions during the five-year relationship and helped drive customer traffic to Naivas stores.
The relationship began deteriorating towards the end of 2025 when Naivas allegedly sought to slash FlexPay’s commission from 5 percent to between 0.5 and 1 percent. FlexPay countered with 3 percent, but no agreement was reached.
Around the same period, FlexPay says its systems began detecting suspicious transactions involving Naivas employees. In some cases, a Sh10,000 purchase allegedly appeared as Sh100,000 before being reversed as a typographical error.
FlexPay claimed such transactions could have increased employee incentives and said its audit identified more than Sh300 million displaying the pattern. The allegations have not been independently established.
Naivas, however, accused FlexPay of failing to remit money owed to the supermarket.
On March 3, 2026, Naivas demanded Sh29.57 million. Its lawyers later demanded Sh30.21 million, before the figure rose to Sh31.21 million within two weeks.
FlexPay disputed the calculations, arguing that the accounts had to take into consideration unpaid loyalty-point reimbursements, commissions, disputed transactions and payments it had already made. FlexPay also claimed Naivas owed it more than Sh24 million in loyalty-point reimbursements.
Then came the dramatic break.
On March 6, Naivas internally ordered its branches to immediately stop accepting FlexPay transactions, remove its promotional material and prevent FlexPay staff from operating inside stores. The formal termination notice followed on March 17.
Martin Kariuki Maina and Johnson Gituma Mwangi
The irony is that the contract reportedly provided for negotiation, mediation and, if necessary, arbitration. FlexPay executives sought a meeting to reconcile the accounts, but the parties never agreed on the final figure.
Instead, the dispute moved into the criminal justice system.
Naivas reported FlexPay over the disputed funds, while FlexPay reported alleged suspicious transactions involving Naivas employees to the DCI’s Economic Crimes Unit.
FlexPay subsequently complained to the ODPP, alleging that criminal investigations were being used to pressure it over the Sh30 million commercial dispute. The ODPP sought an update from the DCI, although this did not establish that police had been misused.
On September 1, DCI officers arrested FlexPay founders Martin Kariuki Maina and Johnson Gituma Mwangi. They spent the night at Kilimani Police Station before being released on police bond.
FlexPay has since sued Naivas, the DCI and the ODPP and asked prosecutors not to approve charges against its executives.
The Naivas-FlexPay saga therefore leaves a troubling question hanging over the supermarket’s relationship with third-party fintech partners: How did a partnership that processed more than Sh3 billion over five years collapse over a disputed Sh30 million account, with contractual reconciliation giving way to police arrests?
The court will ultimately have to determine whether the matter was a commercial dispute that became criminalised, or whether the disputed accounts contained evidence of genuine criminal conduct.
For now, allegations by both sides remain unproven.
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