Buy Now, Pay Later (BNPL) has become a popular way to shop in South Africa. It promises convenience, interest-free instalments, and quick approval. For households under pressure from rising costs, it feels like a lifeline.
But financial experts warn that the convenience comes with serious Buy Now, Pay Later risks. Unrecorded debt, weak regulation, and missed payments can trap consumers in long-term financial trouble. This guide explains the risks, shares expert opinions, and offers practical advice for using BNPL wisely.
Why Buy Now, Pay Later Is Growing in South Africa
South Africans face higher costs for food, fuel, school fees, and everyday expenses. Families are looking for flexible ways to manage their money.
BNPL providers such as PayJustNow and FinChoice are growing fast. Weaver Fintech reported more than 110,000 new PayJustNow sign-ups every month in early 2025, plus 100,000 short-term lending transactions monthly through FinChoice.
BNPL is not only used for fashion or gadgets. People are spreading the cost of:
- School uniforms
- Tyres and car repairs
- Medical bills
- Household appliances
BNPL can help with budgeting, but the risks are increasing just as quickly as the sign-ups.
The Hidden Buy Now, Pay Later Risks
Over-Indebtedness and Loan Stacking
BNPL makes it easy to open accounts with multiple providers. Because these debts are not always reported to credit bureaus, lenders cannot see the full picture. This creates “hidden debt”.
When several small instalments add up, households may fall behind. Missed payments bring penalties, interest, and damaged credit records.
Consumer Protection Gaps
In South Africa, BNPL often sits outside the National Credit Act (NCA). Unlike regulated loans, BNPL providers may not perform proper affordability checks or give clear disclosures.
This leaves consumers exposed. They may take on debt without understanding the full costs or the risks involved.
Impact on Financial Health
BNPL may look harmless, but late payments can quickly become expensive. Fees and penalties grow, and some providers report defaults to credit bureaus.
Research also shows BNPL users often have less savings, making them more vulnerable. Investopedia found that nearly one in four BNPL users in the US face financial risk. South Africa could see the same pattern.
Other countries are already acting. The UK, US, and Australia are introducing tougher BNPL rules to protect consumers after rising defaults.
Expert Opinions on Buy Now, Pay Later Risks
MFSA: Push for Stronger Regulation
Leonie van Pletzen, CEO of Micro Finance South Africa (MFSA), is concerned about BNPL’s rapid growth. She warns it could drive higher levels of debt if left unregulated.
MFSA wants BNPL to be included under the National Credit Act. This would mean affordability checks, credit bureau reporting, and clear disclosures for consumers.
Van Pletzen calls for cooperation rather than restrictions:
“We are not calling for limits that stifle innovation. Instead, we want BNPL providers and regulators to work together on an industry code that balances convenience with responsibility.”
PayJustNow: Responsible Use Matters
Dean Hyde, COO of PayJustNow, sees BNPL as a tool when used correctly. He says flexible payments can help households manage rising costs without turning to high-interest debt.
“With living costs on the rise, now is the time to think carefully about how payment choices shape financial well-being,” Hyde explains. “The right payment method can give you breathing space, but it should also help you avoid debt traps.”
Hyde notes that many customers use BNPL for essentials like school fees or medical bills, not just luxuries.
How to Use BNPL Responsibly
BNPL can support your budget if you treat it like credit and follow a few simple rules.
Match the Expense to the Payment Method
- Day-to-day costs: Use cash or debit for groceries, fuel, and small items.
- Essential expenses: Short BNPL instalments may help with school fees or repairs.
- Discretionary expenses: Save and pay upfront. Use BNPL only if you can afford it.
- Emergency costs: Choose interest-free BNPL plans, but read the fine print first.
Golden Rules for Consumers
- Do not repay a product over longer than it lasts. Example: Don’t pay for skincare over six months if it runs out in three.
- Always check the total cost, not just the instalments. Hidden fees can add up.
- Align payments with your income cycle. Avoid instalments that fall mid-month if you are paid at month’s end.
- Treat BNPL as a budgeting tool, not as extra money.
- Track your BNPL accounts the same way you track your bank balance. They are still debts.
What Regulators and Providers Must Do
BNPL is here to stay, but stronger protections are needed.
- Regulators: The National Credit Regulator (NCR) should bring BNPL under the NCA with affordability checks, bureau reporting, and transparent contracts (NCR).
- Providers: BNPL companies should act responsibly, making terms easy to understand and avoiding hidden fees.
- Collaboration: An industry code could protect consumers while allowing BNPL to grow responsibly.
Looking Ahead: The Future of Buy Now, Pay Later in South Africa
BNPL gives South Africans more choice and flexibility. It helps families manage tight budgets, spread essential costs, and avoid expensive loans.
But the risks are real. Hidden debt, weak regulation, and missed payments can cause long-term financial harm. Consumers need to use BNPL carefully, while regulators and providers must work together to strengthen protections.
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