By Paul Behrmann, CEO and Founder of Payflex
Buy now, pay later approach
South African fintech, Payflex, has brought the buy now pay later (BNPL) shopping phenomenon to the country and online merchants are reporting that the digital payment solution is having a positive effect on their sales.
The BNPL has enjoyed extraordinary popularity in Australia, the USA and Europe. Payflex customers can shop at over 700 well-known stores like Cotton-on, Superbalist.com and RunwaySale. Payments are split over four interest-free instalments.
In South Africa, online shopping has evolved and there has been a rise in online stores. Businesses need innovative digital payment solutions that make shopping easier for their customers, which has led to this new BNPL interest-free trend now taking online shopping by storm.
South Africa’s exploding e-commerce sector
The pandemic has rapidly accelerated the adoption of digital payments and more consumers are demanding contactless payment.
The growth of South Africa’s e-commerce sector has been fast-tracked over the past year – local online retail is set to pass the R62 billion mark this year, which is almost 4.5 times the 2018 figure of R14-billion. A recent study by Mastercard shows that more than half of South Africans are now shopping online.
South African shoppers, like shoppers elsewhere, are embracing BNPL. Over the last year, Payflex has more than quadrupled its year-on-year customer sign-ups as more consumers seek interest-free payment solutions that avoid the interest expense of traditional credit products. The company is adding about 80 e-commerce stores, and more than 10 000 new registered users every month.
Higher average basket sizes for merchants
Online stores that offer Payflex as a payment option report that average basket size increases by 20-30% across all merchant categories. More good news for online stores is that more than 70% of Payflex customers have made a repeat purchase, and most shop across different Payflex merchants.
Paul Behrmann, CEO and founder of Payflex, says, “South Africans need a payment solution that does not rely on costly credit and is simple to use. Traditionally, paying via instalments in South Africa has been associated with high-interest charges, as you are penalised for paying for the item over time. But by using Payflex, customers can plan ahead and ensure that their purchases are interest-free.”
Customers want simplicity
Customers want quick, personalised, tailored shopping experiences that use simple processes. The Payflex process is simple – select Payflex as your payment method at checkout, provide your ID number and you’ll be assessed in seconds. Fees only become due if you miss a scheduled payment, but you’ll receive email reminders in advance of each payment to help your budget and make all your payments on time. Payflex accepts any American Express, Visa or Mastercard cards (debit, credit or cheque).
Behrmann says that fashion has proved very popular at retailers such as Superbalist.com, Cotton On and RunwaySale. “We are also seeing growth in usage with fitness brands and products like The Pro Shop, CycleLab and Rebel Elite Fitness. There are also new tech, electronics partners launching soon”, he says.
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