Pick n Pay's newly launched Store Account allows its customers the option of purchasing groceries on credit. According to the retailer, there is no charge for opening a Store Account, and customers face no transaction charges, admin fees or joining fees. Monthly account fees are R10 for active users, but there will be no fee if the account has no balance and is not used in that month.
The supermarket says it will use its Smart Shopper card programme to select customers who qualify to buy on credit. The account offers up to 55 days’ interest-free credit if the balance on their account is paid in full each month, as well as "benefits unique to Store Account holders". The first of these is a R200 discount off R500 or more spent on their first shop using the Store Account.
“The high cost of credit is a significant reason why customers have less disposable income for their grocery shop. Hidden costs such as initiation fees, administration fees, mandatory insurance fees and penalty fees exacerbate the cost of credit. We have worked with RCS to design a product that has none of these hidden fees and the lowest possible monthly fee," said Pick n Pay’s deputy CEO, Richard van Rensburg.
He also noted that Pick n Pay will not earn income from the credit granting process.
“The product has been designed to be the most affordable form of credit - a monthly account where no interest is charged if the balance is paid in full. The Store Account has flexible interest-bearing budget options and also enables a customer to place individual transactions for high ticket items on budget while still retaining the free interest benefit for the remaining transactions on the account.”
RCS, part of the BNP Paribas Group, is the credit provider for the Store Account and will bear the credit risk and funding costs.