PODCAST | Buy-now-pay-later online payment model grows in SA

The growth of buy now pay later (BNPL) in SA’s online retail sector is the focus in this edition of Business Day Spotlight. 

Host Mudiwa Gavaza is joined by Paul Behrmann, CEO of Payflex. 

Payflex is a BNPL business that allows shoppers to pay a small upfront amount for their online purchases, receiving the goods and then paying the rest off in a series of equal instalments with no interest.

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The model has been going for about seven years in Australia. Behrmann, brought the idea to SA after clinching a deal with Australian part-payment company Zip, which had a 30% stake in Payflex at the time. Through the partnership, PayFlex had access to Zip’s technology and a business network that extends to the UK.

As e-commerce has grown in SA, so has PayFlex’s business, Behrmann says, admitting that the initial push to get the company off the ground was tough. He credits the Covid-19 pandemic as having helped to change consumer behaviour towards more online shopping.

Behrmann says consumers making use of BNPL tend to be those who already have access to credit cards or other forms of unsecured funding.

In a country where debt is an issue that has plagued consumers for decades, with many South Africans living beyond their means, Behrmann says the structure of BNPL actually helps to promote more responsible spending by consumers. 

Topics of discussion include: the evolution of Payflex as a business; the growth of BNPL in SA and other parts of the world; debt culture in SA; the growth of online retail spurred on by Covid-19; trends in BNPL; and an outlook of how the space is likely to evolve over time. 

Behrmann says more than 300,000 shoppers have used the platform since 2019. In SA’s relatively small e-commerce market it competes with companies such as PayJustNow and Checkid, and admittedly has a long way to go.

Payflex was recently acquired by Zip, which has more than 11.4-million customers globally.

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Business Day Spotlight is a MultimediaLIVE production.