The Buy Now Pay Later (BNPL) business model which allows customers to take home a product and make the payment over a stipulated period of time is gaining popularity in South Africa. As a recent report by one of South Africa’s leading “buy now pay later” players Payflex shows, there’s been a 30% increase in the use of BNPL payment options in the country.
According to a Mckinsey report, 75% of customers seek financing in the early stage of the purchasing journey, and this could inform the significant rise in BNPL payment in the country. A PayPal report also suggests that BNPL is most effective when promoted via a merchant’s website or e-commerce store.
As a pioneer in South Africa’s BNPL fintech space, Payflex disclosed that it soared from 70 merchants in 2019 to over 700 active stores this year. The part-payment platform also grew from a shopper base of 2, 000 to 80, 000 in 12 months
“With a BNPL payment option, customers tend to convert quicker and since they only pay for a quarter of their purchase right away, they tend to buy more and load their shopping cart. Merchants are settled in full for all purchases next business day, which increases cash flow and lowers fraud and chargeback risks. It’s a no-brainer,” says Jarred Deacon, sales director at Payflex.
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