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Picture: SUPPLIED
Picture: SUPPLIED

HomeChoice International chair Shirley Maltz was shopping for sneakers when her son urged her to sign up for PayJustNow, a service that allows consumers to buy goods on credit without
paying interest.

Maltz agreed to buy the shoes for her son — and soon after in February HomeChoice International bought an 85% stake in PayJustNow, which allows consumers to buy and immediately receive retail goods by making a payment equal to a third of price upfront with the balance paid over the next to three to two months.

It is one example of a growing type of retail credit called buy now pay later that allows consumers interest-free payments and is driven by technology advancements. It takes the credit risk away from retailers who get their cash immediately. Local bank Tyme Bank has started a similar credit service and offers it to TFG whose brands include Markham, Fabiani, Jet, Totalsports, American Swiss and @home. In this case, consumers apply for credit in store, pay half of the bill upfront and the balance over the next two months.

HomeChoice International’s acquisition has partnered with retailers including Dial-A-Bed, Cape Union Mart, We Fix, Edgars, Mica hardware, Queenspark, Mattress Warehouse, Jeep and Golfers Club. The transactions are not huge with the average outstanding balance at R720.

The tech behind the buy now pay later offerings allows lenders to verify the person asking for the loan automatically, together with their bank details, allowing them to assess credit risk immediately. PayJustNow does not charge interest, and the service does not fall under National Credit Act, with the provider making its money from retailers who pay a commission and benefit from improved sales through the credit offering.

HomeChoice International says retailers on average see a 30% increase in consumer spend when they offer such services.

The buy now pay later models, says Maltz, quoting an Accenture 2021 report, make up 2% of the credit market in retail and are expected to drive at least $100bn in retail sales globally this year. She says buy now pay later systems have a huge opportunity to grow, while retail credit and debit card spending has plateaued globally.

HomeChoice International already has 270,000 FinChoice clients who apply for loans and insurance on its app in a fully automated
process that requires no human to check documents.

HomeChoice International is known for selling bedding and blankets directly and through call centres to township residents. It has been investing in fintech to drive lending and insurance services. It pays its customers’ data costs when using the app to drive use.

Fintech uses technology to offer services that compete with traditional financial methods in the provision of financial services such as loans and credit.

Both Vodacom and MTN are investing heavily in fintech services to improve mobile payment systems and increase revenue as the costs of data and their profits drop.

Maltz, said HomeChoice insurance, loans, retail sales and buy now pay later offerings "provide our more than 1-million mobile-savvy customers with quick, seamless and convenient digital shopping journeys and financial services".

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