The Surge of Buy Now, Pay Later in South Africa
The Buy Now, Pay Later (BNPL) sector is experiencing tremendous growth, with retailers that implement this payment option witnessing substantial surges in both sales volume and order values.
Recent reports indicate that the BNPL market has achieved an impressive compound annual growth rate (CAGR) of 23.5% across various regions.
In an exciting development, clients of EFT Corporation now have the opportunity to incorporate this enhanced payment feature at checkout, thanks to a new collaboration with Happy Pay.
EFT Corporation has successfully integrated Happy Pay’s pioneering BNPL service into its hosted checkout platform, thereby providing merchants throughout South Africa with increased payment flexibility for their online customers.
This service operates through EFT Corporation’s sophisticated technology infrastructure, ensuring a seamless user experience that does not necessitate additional development efforts.
Catherine Korsten, the Chief Commercial Officer at EFT Corporation, emphasized that the payment provider aimed to expand its offering to e-commerce clients, allowing merchants to enjoy greater payment flexibility without the complications or risks associated with direct consumer credit management.
Strategic Partnership Enhances Retailer Options
Clients engaging in e-commerce transactions with us already have a diverse array of payment methods at their disposal, including card detail capture, online Scan to Pay, instant EFT solutions, and more.
Given the rapid ascendance of the BNPL market and the growing consumer expectation for such options, we felt it was imperative to include this feature for our clients, she remarked.
EFT Corporation identified Happy Pay as the most fitting partner to enhance its merchant ecosystem.
Happy Pay’s innovative model has been crafted to cater to local requirements, aligning with the monthly income patterns prevalent in South Africa.
This enables consumers to make purchases and divide the expense into two interest-free payments, conveniently timed around their paydays—without the necessity for upfront deposits.
It emerges as a transparent, fee-free alternative to conventional credit, resonating with the financial realities faced by South African consumers, Korsten elaborated.
Streamlined Process for Merchants and Consumers
The integration process is exceptionally straightforward for both merchants and consumers. Upon enabling Happy Pay through EFT Corporation’s platform, this payment option becomes visible at checkout.
When users activate the feature and register with Happy Pay, an AI-driven approval system swiftly evaluates affordability, allowing credit approval in a matter of minutes.
The initial installment, amounting to 50% of the total purchase price, is due on the first payday following the transaction, with the remaining half payable on the subsequent payday.
Importantly, neither EFT Corporation nor its clients bear any credit risk, as EFT Corporation acts as the facilitator between the consumer and Happy Pay within its established environment.
Happy Pay is tasked with onboarding the consumer, paying the merchant in full, and managing any subsequent payments directly from the consumer.
Commitment to Ethical Finance
Wesley Billett, CEO of Happy Pay, highlighted that a mutual dedication to ethical and inclusive finance rendered EFT Corporation the perfect ally in this venture.
“When designed effectively, Buy Now, Pay Later can bridge the financial inclusion gap by presenting a viable alternative to high-interest retail credit and payday loans. Traditional credit frameworks depend on antiquated scoring systems and impose heavy costs on consumers simply for access to credit,” Billett explained.
“At Happy Pay, we invert this model. By leveraging real-time affordability data, we provide cost-effective installments to consumers, funded by the additional value we create for merchants through enhanced conversion rates, larger basket sizes, and new customer acquisition.”
This paradigm not only aids consumers in avoiding debilitating debt spirals but also equips merchants with a formidable growth tool, paving the way for a more inclusive, sustainable consumer finance model that saves South African households millions in interest and fees annually.
Impact and Transformation
For merchants, the statistics are compelling: Happy Pay’s users have observed an average increase in basket sizes by an astonishing 190%, all while sidestepping the risks linked to credit management.
Korsten concluded, We have observed BNPL serve as a transformative mechanism, empowering financially underserved communities.
Once regarded as a niche payment option, it is now unmistakably apparent why BNPL is establishing itself as a formidable player in the market, challenging traditional payment paradigms and offering a route to financial inclusion for many overlooked consumers.
Financial inclusion remains a priority at EFT Corporation, and this represents yet another avenue through which we aim to bridge that divide.
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