South Africa’s Buy Now Pay Later (BNPL) market is booming – and it’s attracting growing numbers of retailers looking to expand their customer base and drive more sales, as shopper signups for the instalment-based payment mechanism continue to surge.
Craig Newborn, CEO of local BNPL start-up PayJustNow, says the company has seen 1660% growth in its retailer base in the past 24 months, with retailers seeing a ‘sharp increase’ in gross merchandise value (GMV) for transactions using BNPL over this period.
PayJustNow’s BNPL payment mechanism allows customers to split the cost of a purchase into three equal interest-free payments, whether shopping online or in person. The benefits of the system include the fact that consumers get their goods – and retailers get paid – immediately.
While BNPL currently makes up a small part of the broader payments market, Newborn believes it’s only a matter of time before it goes mainstream. Retailers like Edgars, PUMA, Cape Union Mart, and Under Armour are among the leading brands to have signed up with PayJustNow.
“Consumers are looking for easy payment options that give them flexibility. We’ve seen 52% of all transacting customers across our retailer base sign up before making a purchase at a retailer, which means we’re driving consumer buying power and helping retailers acquire new customers. But the real winners are the retailers, who are seeing significantly increased conversions and customer loyalty,” said Newborn.
PayJustNow’s data shows customers are now shopping twice as frequently, and can now spend almost double as much per year. This is partly due to BNPL evolving from being a purely online shopping phenomenon during the early days of the pandemic to in-store shopping as well. The company’s 120% growth in participating merchants in the past year has included a 257% growth in in-store locations.
A locally developed app, Pay Up, allows instore retailers to process split payments with no Point of Sale (POS) integration, which means they can offer PayJustNow’s solution almost instantaneously without integration delays.
“Ultimately, BNPL provides a major opportunity to boost the South African retail sector. In the process, we’re offering consumers a responsible alternative to credit that is interest free and easy to use,” said Newborn.