The buy now, pay later (BNPL) model does not encourage or drive overspending, according to South African payment platform Happy Pay, which says this would not serve anyone’s interest in the digital payment ecosystem.
Speaking after the announcement of Happy Pay’s partnership with South African fintech firm Ozow to enable merchants to offer BNPL at checkout, Wesley Billett, CEO of Happy Pay, said the notion that BNPL drives overspending misses the point.
“This is not interest- and fee-bearing credit where lenders make more money when people carry balances or miss payments. We are interest-free and merchant-funded. If a customer cannot pay, we lose money. There is no upside in pushing someone beyond what they can afford, as it would break the model. The only way is to keep limits grounded in real affordability. And now that the three biggest BNPL players in the country are reporting to credit bureaus, the data shows that defaults are among the lowest in the market,” said Billett.
What BNPL is doing, he added, is replacing expensive credit with a free alternative.
“At its core, BNPL should be saving people money, not costing them more. That is the goal and that is the reason we exist. The question that should be asked is how BNPL can sustainably reduce the 28% of household income in South Africa that’s currently going towards debt repayments," said Billett.
Industry growth and context
According to Ozow, BNPL is emerging as a key enabler for merchants to meet growing demand for flexible payment options in SA's competitive e-commerce space. By the end of 2030, SA's BNPL sector is projected to expand to approximately $1.30 billion (roughly R21.3 billion). In January 2026, global financial solutions provider Stitch projected the market would exceed $1 billion within the next five years, after reaching an estimated $815 million (about R13.4 billion) in 2025.
Shailesh Mali, senior consultant for credit risk decisioning at LexisNexis Risk Solutions, said BNPL platforms are underpinned by streamlined checkout experiences, real-time risk decisioning and seamless e-commerce integration. “Secure payment flows, signed callbacks and environment separation enable reliable authorisation, settlement and order updates across South African online stores,” Mali said.
Ozow and Happy Pay said BNPL has consistently been linked to higher conversion rates, increased basket sizes and improved customer acquisition, particularly among younger consumers. They cited Ken Research, which shows that an estimated 60% of South African consumers favour flexible payment methods such as BNPL.
Lyle Eckstein, co-founder and chief product officer at Ozow, said merchants are looking for practical ways to improve performance at checkout without adding complexity. "This partnership enables exactly that, giving merchants access to a proven payment method that can drive conversion and unlock new customer segments.”
Through the integration, Ozow merchants can offer customers interest-free instalments within the existing payment flow, while receiving the full settlement amount weekly. The partners said this addresses upfront cost, one of the leading causes of cart abandonment.
The partnership forms part of Ozow’s evolution into a broader payments and commerce enablement platform.
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