South Africa’s BNPL Market Experiencing Rapid Growth Fueled by E-Commerce Boom
A recent report has revealed that South Africa’s Buy Now, Pay Later (BNPL) market is experiencing rapid growth fueled by the increasing demand for flexible credit options and the booming e-commerce sector.
According to Global publisher of market intelligence, equity, and economy, Ken Research, it disclosed that the South African BNPL market is driven by digitalization, government support, increasing working-age population, with an upsurge in Gen-Z & millennial population coupled with shifting preference towards easy interest-free extra credit line sources.
The global publisher predicts a remarkable 14.8% CAGR, for South Africa’s BNPL market, translating to a substantial $5.7 billion market size by 2027.
It is understood that Buy Now, Pay Later (BNPL) is emerging as a cashflow-friendly budgeting tool that helps consumers by allowing them to spread the cost of their purchases across three months without paying any interest or fees while receiving the goods immediately.
The South African BNPL market is poised for continued growth, driven by several exciting factors which are;
- Focus on Financial Inclusion: Partnerships with microfinance institutions and targeted offerings can expand access to BNPL for underserved communities.
- Regulatory Clarity: The establishment of clear regulations will promote responsible lending practices and build consumer confidence.
- Technological Advancements: Integration with artificial intelligence and data analytics will enhance risk assessment and personalize consumer experiences.
- Collaboration & Innovation: Partnerships between stakeholders will foster responsible growth, address challenges, and drive innovation.
In South Africa, the BNPL payment method is booming, with PayJust Now more than tripling its customer numbers in 2022.
Customers are reportedly cutting back on their discretionary spending to make sure they have enough money for the essentials. As a result, there is a visible clear shift in spending behavior, with more people than ever looking to stretch their rands.
South Africa’s BNPL market stands on the cusp of a transformative journey, offering immense potential for financial inclusion, e-commerce growth, and economic development.
