BNPL’s Festive Surge Raises Affordability Concerns, Cautions Mettus 

With the festive season approaching, Buy Now Pay Later (BNPL) is fast becoming the go-to checkout option for South African shoppers. The local market is forecast to hit around $815 million by the end of the year. While the appeal is clear, so too are the risks. Mettus, a collective of data- and analytics-businesses (including credit bureau Xpert Decision Systems), warns that the convenience comes with a growing affordability risk, especially as consumers stack multiple BNPL deals across different apps.

The key to using BNPL safely is treating it as real credit and factoring it into the budget from the start.

“One of the fastest-growing behaviours we are picking up is multi-app BNPL stacking, for example, a purchase on one platform at 10:00, another at 13:00, and another in the evening. Individually, the instalments look small. Together they can wipe out half a paycheque,” says Siva Dhever, Head of Credit Analytics at Mettus.

The BNPL affordability blind spot

FinCoNet, an international financial consumer protection organisation, warns that many BNPL users focus on monthly instalments rather than the full cost of credit, which can create hidden repayment burdens. This creates a gap between what feels affordable today and what the budget can realistically carry a few months later. Mettus says this pattern mirrors what the broader credit market often reveals about instalment-based spending, a trend highlighted in the National Credit Regulator’s Credit Bureau Monitor, which notes that affordability strain frequently emerges as several smaller credit commitments add up.

“BNPL feels manageable at first because the initial instalment looks small, but international research shows that many people underestimate the impact of the later payments. It is rarely the first instalment that puts pressure on a household budget. It is the slow build-up of several small commitments that creates strain,” says Dhever.

The BNPL market in South Africa grew at a compounded annual rate of approximately 64% between 2019 and 2022. While missed BNPL instalments are not reported to credit bureaus, they can still put pressure on a household’s ability to meet other financial commitments. This strain can reduce overall affordability, especially when several instalments overlap.

A new gateway to credit for younger consumers

Buy Now Pay Later is especially popular with younger buyers. According to local research, 56.5% of South Africans have used BNPL for online shopping. For many, it is their first meaningful experience with credit.

“For many young adults, BNPL is often one of their first experiences with managing instalments. That is why financial education becomes so important. Understanding how each repayment fits into the budget helps prevent over-indebtedness and builds healthier long-term money habits,” says Dhever.

Mettus encourages first-time users to budget carefully, understand the full repayment schedule, and keep BNPL commitments manageable so they do not add unnecessary pressure to monthly expenses.

Emerging warning signals

BNPL offers flexibility, but that convenience must not lead to complacency. There are several red flags to consider:

• Opening multiple BNPL accounts at the same time from different providers.
• Using BNPL for everyday essentials, such as groceries or household items, rather than planned purchases.
• Worrying about whether upcoming BNPL instalments will fit into the monthly budget.

“When BNPL stops feeling convenient and starts feeling stressful, it is a sign to pause, pay down existing balances, and reconsider new purchases,” says Dhever.

Retailers’ role in responsible BNPL

From the business side, Buy Now Pay Later can boost conversion rates and strengthen customer relationships. But Mettus says retailers must implement it responsibly. Selecting reputable, regulated providers, ensuring clear consumer communication and monitoring data privacy are all essential.

“Retailers should communicate repayment terms transparently and ensure that customers truly understand the commitments they are entering into.”

The balanced view

When used wisely, BNPL can smooth festive spending, build a positive payment history, and offer flexibility in tight budget months. Mettus emphasises this as part of its core mission to move people and organisations from guessing to knowing.

“When consumers and businesses understand the true cost and impact of every credit decision, BNPL becomes less of a risk and more of a useful budgeting tool for the festive season and beyond,” concludes Dhever.

For more information on Mettus and its credit-intelligence offerings, visit mettus.co.za.