PRESS OFFICE
LISTING
Homenewsabout usContact UsWebsite
News

JanuWorry debts drive demand in SA for split payments with no interest

January - or JanuWorry as it is known - is extremely stressful for many South Africans faced with the consequences of festive season holiday splurges and back to school costs. South Africans, who are amongst the world's worst savers, face additional financial pressure as unemployment rates soar, the cost of living continues to rise and Covid's impact on the economy takes its toll.
JanuWorry debts drive demand in SA for split payments with no interest

Experian consumer default reports show that there are significant increases in delinquency rates for personal loans and credit cards, so many consumers reluctant to take on additional debt have opted for flexible alternative payment solutions such as buy now pay later (BNPL). This payment approach allows consumers to stagger payments over a fixed period without incurring interest.

Paul Behrmann, CEO and founder Payflex
Paul Behrmann, CEO and founder Payflex

Paul Behrmann, CEO of SA BNPL provider Payflex, says that the number of customers using Payflex has more than tripled compared to last year. “Customers can plan their purchases to stretch their payments over two salary cycles without entering into expensive credit agreements, which is especially useful in January. The dramatic increase in Payflex’s customers reflects South Africans’ preference for interest-free payment solutions like BNPL. South Africans can take advantage by going to Payflex’s website which hosts SA’s largest digital mall or by utilising our app,” he says.

In addition to more customers using BNPL for festive season shopping, Payflex also saw more than a threefold increase in order values, number of orders and number of merchants.

Interestingly, average volumes during the month of December dropped closer to Christmas. “Given that Payflex BNPL purchases are from online merchants, customers were probably shopping early to allow for physical delivery in time for Christmas,” explains Behrmann.

BNPL is a global phenomenon being taken up by consumers who have learned to shop differently during the pandemic and want to avoid taking on further debt. While BNPL’s global market share was 2.1% in 2020, it is expected to grow to 4.2% by 2024.

Payflex was recently acquired by global BNPL provider Zip, which has millions of customers and tens of thousands of merchants in 13 countries. “Interestingly, customer default rates in SA are the lowest in Zip globally, putting an end to the idea that South Africans do not honour their financial commitments. Risk-averse consumers are looking for budget-friendly payment options, so while the credit card will continue to be a significant payment method, the alternative payments landscape has emerged as a major contender in the digital payments arena,” Behrmann adds.

20 Jan 2022 12:24

<<Back





Comment