Innovative retail and fintech solutions are driving growth in SA’s buy now, pay later (BNPL) market, which is projected to expand by 13.6% annually. According to global financial solutions providerStitch, the market is expected to exceed $1 billion within the next five years, after reaching an estimated $815 million in 2025.
This growth is being supported by advances in digital payment technology, according to LexisNexis Risk Solutions, which highlights the role of innovation in enabling BNPL adoption at scale.
Shailesh Mali, senior consultant for credit risk decisioning at LexisNexis Risk Solutions, said BNPL platforms are underpinned by streamlined checkout experiences, modern payment infrastructure, real-time risk decisioning and seamless e-commerce integration.
He said drop-in web and mobile software development kits, as well as in-store QR codes, enable one-click payment journeys embedded in e-commerce platforms and mobile apps, supported by simple, instant sign-up processes designed to reduce friction at checkout.
“Secure payment flows, signed callbacks and environment separation enable reliable authorisation, settlement and order updates across South African online stores,” Mali said. “Cloud-based decisioning APIs combine device fingerprinting, behavioural intelligence and digital identity graphs to assess early payment default and fraud risk within milliseconds.”
He added that plug-and-play connectors and partner integrations allow merchants to offer BNPL alongside card payments with minimal engineering effort, improving conversion rates and average basket sizes.
Stakeholder dynamics
Balancing the interests of multiple stakeholders is critical to the sustainable growth of the BNPL market in SA, Mali noted.
“For merchants, BNPL boosts conversion and basket size, with providers settling upfront and opening access to younger, digital shoppers, while also absorbing default and fraud risk,” he said.
From a technology service provider perspective, fintech companies benefit from rapid adoption and ecosystem expansion, but face margin pressure, profitability challenges and rising compliance costs as regulatory frameworks evolve. The absence of clear regulation also increases operational and reputational risk.
Mali added that BNPL providers are increasingly encountering cases of merchant collusion fraud in SA.
Learning from mature markets
Mali said SA’s BNPL market is following a trajectory similar to that seen in more mature markets such as Australia and the UK.
Mobile-first BNPL platforms are increasingly shifting credit decisioning to the point of checkout, effectively making access to credit a one-tap experience within merchant apps and digital wallets. This has resulted in higher conversion rates, lower customer acquisition costs and expanded access to consumers with limited credit histories.
However, the added convenience also heightens exposure to fraud and credit risk. Advanced data and analytics play a critical role in strengthening decisioning across the BNPL life cycle by delivering real-time fraud and credit risk insights, Mali said.
Sustained growth and expansion
The South African BNPL market remains on a sustained growth path, reflecting a broader global fintech trend in which BNPL platforms are evolving into hubs for flexible financing and related services.
Some providers are expanding beyond basic instalment credit into broader embedded finance offerings, including extended financing options, savings tools and, potentially, insurance products, in an effort to increase customer value and retention.
Embedded credit at the point of sale continues to drive adoption, with repeat usage and expanded financing options contributing to higher average basket values and increased consumer engagement.
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