Buy Now Pay Later (BNPL) is quickly becoming one of the most preferred and most modern payment systems in the world. But nowhere else is it expected to be more impactful than in Africa where dire economic straits have severely hampered people’s purchasing power, forcing them to embrace alternatives that literally help them buy now and pay later.
Indeed, Craig Newborn, CEO of the foremost South African BNPL company, PayJustNow wasn’t exaggerating when he told Technext that “The BNPL industry is booming, and we’ve continued to see high adoption rates, signing up a stadium full of customers each month.” This is a testament to how payment solutions like this are in great demand on the continent.
Recently crowned the Best BNPL Service at the 2023 Global Payments Innovation Awards, PayJustNow is a Buy Now Pay Later company that has been servicing the South African market over the last four years.
Speaking on the BNPL model in Africa, the Co-Founder and CEO of the company, agreed that in South Africa, just like everywhere else, people are suffering from credit issues and are dipping ever deeper into credit just to get through the month. This, he admits, should raise a few red flags for all credit providers.
Interestingly, this severe lack of purchasing power presents a double-pronged situation. First, it means Africa is where BNPL service is needed even more given the people’s financial inadequacies. On the other hand, these financial inadequacies also mean the ability of people to actually complete their payments later is greatly limited. There, therefore, has to be a balance and within this balance is where African BNPL companies like PayJustNow play in.
“For consumers right now, it’s a question of how you protect your disposable income from rising inflation and interest rates but still get those important purchases made without breaking the bank. Increasingly, the answer lies in Buy Now, Pay Later because it is becoming a cashflow-friendly budgeting tool that helps consumers get the most out of their money while avoiding falling even further into debt,” Craig said.
He also noted that BNPL services across the continent have got to be doing a lot more as an industry to ensure that consumers use credit responsibly. This should include a more stringent credit vetting process and better credit education. These will ensure that customers can afford to fulfil their repayments and use BNPL responsibly.
“When I founded PayJustNow, I had two goals in mind: create more access to responsible credit and encourage South African consumers to be financially savvy. I’m very proud to share that we have kept our default rate at below 2%, despite our significant growth over the last 4 years. This is a testament to our commitment to protecting the consumer.”
Craig Newborn
BNPL is becoming an integral Fintech set-up in Africa
Financial technology has become the most impactful segment of the African tech ecosystem, just like everywhere else. It has attracted the most funding and proffered the most solutions to problems affecting the continent. But unlike everywhere else, Africa’s fintech solutions mostly revolve around financial inclusion. This largely tells the tale of a financially disadvantaged continent.
Consequently, the biggest fintech solutions are those that, one way or another, try to cater to the needs of the financially excluded. This section of people are in the majority. But perhaps no system would cater more to the financially excluded than the BNPL model. This is because it brings a special kind of financial service that helps a majority of people access credit that otherwise would have been inaccessible.
See also: Africa to lead global fintech growth with 32% CAGR and $65bn revenue by 2030
A few years ago, Buy Now Pay Later as a concept was in its infancy, and many observers wondered about its viability in Africa. But today, the face of the African retail credit market has changed and BNPL is fast becoming an alternative payment solution that continues to win the hearts and minds of consumers and retailers alike.
The PayJustNow CEO attributes this to the resilience of the African fintech industry which is constantly pushing the boundaries when it comes to innovating to better the lives of both consumers and businesses.
“As a continent we’ve faced many challenges, which has made us both extremely resilient and agile in the face of an ever-changing macro-economic environment. Africa is a force to be reckoned with in Fintech and product innovations that solve for local challenges,” he said.
Winning the Best BNPL award and what lies ahead
In August 2023, PayJustNow won the Best BNPL award at the Global Payments Innovation Awards. This was a huge feat for an African startup, not only operating in such a dicey space but playing catch up to the rest of the more technologically advanced world.
Craig Newborn attributes this to the company’s ability to listen to its customers while keeping a close eye on trends in the market. With these trends, the company is able to launch more leading solutions to its customers
“It’s been an exciting journey. The real value for us is that 75% of our customers are repeat, which tells us that they love the product and are more likely to shop at retailers that offer the option. On the 31st of August 2023, we celebrated our 1 millionth consumer signup! We have more than 2500 directly integrated merchants, with around 5900 active online and instore points of presence in South Africa. We have a Gross Merchandise Value (GMV) of R544 million as of June 2023.”
Newborn also revealed that the company has 626,726 app users, and close to 2 million visits to its website each month.
Speaking about other services it offers to its teeming customers, the CEO said they have a ‘Deals’ section which allows customers to browse merchant offers and promotions straight from their account on the PayJustNow website or app, which sees more than 120 000 clicks, and over 5 million views per month on average.
There is also a ‘Pay-Up’ Merchant app, which allows in-store merchants to initiate customer signs through QR code, SMS or email. The merchants can also access real-time data, analytics and business or customer insights, process real-time refunds, and access support from the PayJustNow team. 3278 merchants have already signed up and are using this service.
In early 2022, Weaver Fintech, a subsidiary of HiL, acquired 85% stake in PayJustNow after seeing the company’s mind-blowing growth and huge potential.
In conclusion
There is a clear shift in the spending behaviour of Africans. The PayJustNow CEO attributes this to the fact that more people than ever are looking to take advantage of promotions and discounts. To this effect, he advocates a system that gives the people exactly what they want in the bid to get them in tune with the system.
As such, he says his company will continue to build out its ‘Deals’ feature which is already being well received by both customers who are looking for more value, and retailers who are looking to reach new audiences. They also intend to increase brand exposure and drive more sales with the aim to be the first place South Africans go to shop for the best deals and promotions from the country’s top retailers.
“As the largest BNPL provider in South Africa, coupled with our international recognition, we know that we’re on the right track to making the right difference in the lives of both consumers and retailers,” he said.
Technext Newsletter
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!
