South African online shoppers clearly love buy now pay later (BNPL) and overwhelmingly choose it over standard payment or credit options, according to a new study.
Payflex research among more than 600 customers that have used the service found that over 80% of customers surveyed spend more at an online store if BNPL is offered. More than 90% shop more frequently at an online store with Payflex available and almost 80% would not have made their most recent online purchase if not for the BNPL offering.
Paul Behrmann, Payflex CEO, says that in the past year, purchase values for BNPL have been 30%-50% higher than for purchases paid in full up-front or on credit. Merchants still receive payment within 24 hours whether the customer chooses a Payflex buy now option or a BNPL option.
“Shoppers definitely prefer to pay off their purchases in staggered interest-free instalments when given the choice,” he says. “The volumes reported by SA merchants mirror the global trends, which is driving a massive rise in the number of merchants offering BNPL.
“Sales for online stores achieve increases of up to 30% on average order values with the introduction of Payflex as a payment option, but there are improvements in other key business metrics like revenue and new customer acquisition.
“BNPL has not only changed how consumers pay, but how much they buy, how often they buy and where they shop,” says Behrmann.
Customers tend to be younger (25-34) and are attracted to the zero interest rates as well as transparent payment plans and conditions.