No Interest Credit Payments: One of the major reason as to why BNPL is a robust mechanism inside South Africa is due to the fact that customers are allowed to pay the money in three equal instalments with no interest fee. Although, there is a carry forward fee in case the shopper misses the payment deadline, it still is almost negligible making the industry quite lucrative in a region with less per capita income. With a population of ~61 million and USD ~426 Bn GDP as of 2022, South Africa’s economy has been growing at a CAGR of 4.7% during 2016 and 2022.
Disruption Penetrated by COVID-19 Pandemic: The South Africa BNPL market boomed during COVID-19 pandemic as huge chunk of the residents lost their jobs during this period and were surviving on their savings and this push forwarded the need for extra credit line which was catered by the BNPL services. Providers such as PayFlex and PayJust Now are making robust efforts to sustain the rising interest in consumer credit financing.
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Lack of Awareness in the Consumer Segment: Inception of digital payments is still comparatively new in the African market and thus rural consumer segments find themselves being unaware of the latest trends in the BNPL industry. This when coupled with the digital divide in the urban-rural setting is a massive challenge for merchants and BNPL players in South Africa due to lack of means of financial awareness in the country.
South African National Payments System: The South African National Payments System (NPS) was launched in November, 1995 and it was a collaborative effort between South African Reserve Bank and the banking industry. The strategy it envisioned encompasses fundamental principles and critical success factors for reforms in the domestic payment mechanism in the Republic of South Africa. All cards issuing, acquiring and acceptance services must be in compliance with South African legislation. The directive aims to address transactions occurring within South Africa between domestic parties, where such transactions are processed as if they were cross-border transactions as a result of involvement of a foreign card issuer.
Analysts at Ken Research in their latest publication “South Africa Buy Now Pay Later Market Outlook to 2027 – Driven by digitalization, government support, increasing working age population, with upsurge in Gen-Z & millennials population coupled with shifting preference towards easy interest free extra credit line sources” by Ken Research observed that increasing adoption of cashless society with emergence of digital payments fueled by surging working age class will drive the traction of BNPL industry among the users in South Africa. Increasing demand for extra credit line with less stringent KYC procedures without relying on CIBIL scores will be traction for consumers for utilization of BNPL services. Buy Now Pay Later industry in South Africa is expanding at a CAGR of 35.1% in between 2022P and 2027E.
Key Segments Covered: -
South Africa BNPL Market
By mode of payment (by Revenue) 2022 and 2027:
- Online
- Offline
By End Users (by Revenue) 2022 and 2027:
- Retailers
- Food Merchants
- Travel Merchants
By Age Group of Users (by Revenue) 2022 and 2027:
- Below 20 years
- 20-40 years
- Above 40 years
Key Target Audience:
- Bankers and associations
- Government associations
- Corporates
- Investment firms
- Government Bodies & Regulating Authorities
- Fintech companies
- Venture capitalists
Time Period Captured in the Report:
- Historical Year: 2019-2021
- Base Year: 2022
- Forecast Period: 2023– 2027F
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Companies Covered:
- TymeBank
- PAYJUSTNOW
- Mobicred
- PayFlex
Key Topics Covered in the Report:
- BNPL Industry positioning
- Socio demographic Outlook of South Africa
- Presence of Global BNPL Players
- Trends of BPNL Industry
- Market size of BPNL
- BNPL transaction process
- Key Features and developments in South Africa BPNL
- SWOT Analysis of South Africa BNPL
- Issues and Challenges in South Africa BNPL
- Investment Analysis of players in BNPL Space
- Role of Government and regulations in South Africa BNPL
- Porter’s Five force Analysis in South Africa BPNL7
- Future Market Size of BNPL
For More Information on the research report, refer to below link: -
Buy Now Pay Later industry in South Africa
Related Reports by Ken Research: -
KSA Buy Now Pay Later Market Outlook to 2027
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Ken Research
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