The “buy now, pay later” (BNPL) trend is surging in South Africa as cash-strapped consumers turn to these services to cope with rising living costs. While the interest-free installment deals offer short-term relief, financial experts warn that the largely unregulated sector could plunge shoppers into debilitating debt cycles.
Certified financial planner Tsungai Masendeke cautions that BNPL services are often a red flag for financial instability. “If people have to buy products on ‘buy now, pay later’ deals, that is an indication that they cannot afford those products or services,” she says. “The only reason consumers use these deals is because they don’t have the cash flow.”
The Rise of BNPL and Its Risks
Unlike traditional layby systems—where consumers pay off items before taking them home—BNPL allows immediate ownership, effectively acting as a new form of unsecured credit. Masendeke notes that the lack of credit checks makes BNPL dangerously accessible, particularly for those with poor credit histories.
“Because most of these merchants are pushing volumes and sales, they overlook your credit status,” she explains. “But if you have 10 or 15 different BNPL facilities, it will catch up with you—missed payments lead to penalties, high interest rates (up to 25%), and even blacklisting.”
Long-Term Consequences
While BNPL may boost retail sales, Masendeke warns that it creates long-term financial strain. “If you’re buying consumptive goods—things that don’t increase your net worth—that’s bad debt,” she says. “Over time, it impacts your ability to afford basic household expenses.”
Failure to meet BNPL obligations can also damage credit scores, making it harder to secure loans for essential purchases like homes or cars. “If you default, legal action can lead to blacklisting, foreclosures, or summons,” Masendeke adds.
A Call for Responsible Use—and Regulation
With minimal regulatory oversight, BNPL providers face little restriction on lending practices, raising concerns about unchecked debt accumulation. Masendeke urges consumers to exercise caution: “If you can’t pay cash now, you probably can’t afford it. If you must use BNPL, do so sparingly—avoid unnecessary luxuries.”
As South Africans grapple with economic pressures, the BNPL boom highlights a troubling reliance on credit. Without tighter controls or greater financial discipline, experts fear the trend may deepen the country’s debt crisis—one installment at a time.