BNPL or Buy Now Pay Later, is a popular payment method that allows consumers to purchase goods or services without paying for them upfront. Instead, consumers are given the option to pay for their purchases in instalments over a specified period of time. This payment method is often used by retailers and e-commerce companies to attract customers who may not have the funds to make a full payment at the time of purchase.
The BNPL business model is relatively simple. Retailers and e-commerce companies partner with BNPL providers, such as Afterpay or Klarna, to offer their customers the option to pay in instalments. The BNPL provider acts as the intermediary between the retailer and the consumer, handling the instalment payments and any customer disputes that may arise. The retailer or e-commerce company is then paid the full amount of the purchase by the BNPL provider, minus a small transaction fee.
In South Africa, BNPL is becoming increasingly popular, with a number of local retailers and e-commerce companies incorporating it into their payment options. Some examples of South African apps and websites that have incorporated BNPL include:
- Takealot: One of South Africa’s largest online retailers, Takealot offers customers the option to pay for their purchases using Afterpay. Customers can choose to pay for their purchases in four equal instalments, with no interest or fees.
- Superbalist: Another popular online retailer, Superbalist also offers customers the option to pay for their purchases using Afterpay. As with Takealot, customers can choose to pay in four equal instalments, with no interest or fees.
- Zando: A popular online fashion retailer, Zando offers customers the option to pay for their purchases using Klarna. Customers can choose to pay for their purchases in three equal instalments, with no interest or fees.
- Woolworths: One of South Africa’s largest retailers, Woolworths offers customers the option to pay for their purchases using Afterpay in-store. Customers can choose to pay for their purchases in four equal instalments, with no interest or fees.
- Yuppiechef: A popular online homeware retailer, Yuppiechef offers customers the option to pay for their purchases using Klarna. Customers can choose to pay for their purchases in three equal instalments, with no interest or fees.
These examples highlight the growing popularity of BNPL in South Africa, with a number of retailers and e-commerce companies offering it as a payment option to attract customers. This is likely to continue in the future, as more and more consumers become aware of the convenience and flexibility that BNPL offers.
However, it is important to note that while BNPL may seem like a convenient option, it is important for consumers to be aware of the potential risks and drawbacks. For example, late fees may apply if instalment payments are not made on time, and failure to make payments may negatively impact a consumer’s credit score. Additionally, some retailers may charge higher prices for items purchased using BNPL, as they factor in the cost of the transaction fee charged by the BNPL provider.
Overall, BNPL is a popular and convenient payment option that is becoming increasingly popular in South Africa. It offers consumers the ability to purchase goods or services that they may not be able to afford upfront and allows retailers and e-commerce companies to attract customers who may not have the funds to make a full payment at the time of purchase. However, it is important for consumers to be aware of the potential risks and drawbacks before using BNPL, and to use it responsibly.
