EBC Monetary Group says South Africa ought to rigorously assess short-term instalment merchandise are interpreted precisely earlier than BNPL information shapes entry to mainstream credit score.
South Africa may danger turning purchase now, pay later (BNPL) right into a product that shuts individuals out of mainstream credit score, reasonably than serving to them into it, if BNPL information enters credit-scoring programs that have been by no means designed to learn the sort of product pretty. BNPL permits buyers to separate a purchase order into smaller funds over a brief interval, they’ll occur with out curiosity, and has turn into broadly used throughout South Africa, significantly amongst youthful and lower-income customers who could not but qualify for a bank card or private mortgage.
Credit score bureau TransUnion warned that between 15% and 25% of South Africans who at the moment maintain a credit score product, comparable to a mortgage, retailer card or mortgage, may see their credit score rating drop if BNPL accounts are fed into current scoring programs with none adjustment for the way in another way the product works. Utilized to the Nationwide Credit score Regulator (NCR) base of 29.24 million South Africans with an energetic credit score product as of June 2025, that vary implies roughly 4.4 million to 7.3 million individuals might be affected. Which means a client who pays each BNPL instalment on time may nonetheless see their credit score rating fall, just because the system was not constructed to grasp the sort of product.
David Treasured, Senior Market Analyst at EBC Monetary Group, mentioned, “Overborrowing could doubtlessly turn into the subsequent client credit score danger, however it’s not the one issue. A radical examination of the info would uncover different elements in play. It may even uncover blindspots. If a client pays each BNPL instalment on time can seem riskier as a result of the mannequin was constructed for a very completely different product class. This means a market-confidence challenge for lenders, retailers and households.”
How Purchase Now, Pay Later may Penalise First-Time and Decrease-Revenue Debtors who’re Repaying Responsibly
BNPL has been promoted as a means for individuals with little or no credit score historical past to start out constructing one. However that promise could unravel if the act of utilizing BNPL finally ends up making it more durable for those self same individuals to entry a house mortgage, automotive financing, or private mortgage sooner or later. TransUnion discovered that about 17% of BNPL customers are new-to-credit customers, that means they don’t have any prior credit score file, and practically 20% are individuals with some credit score historical past however restricted entry to mainstream financial institution lending. TransUnion additionally discovered no proof that BNPL customers are inherently riskier debtors than anybody else.
Scoring danger helps to find out how BNPL differs from a bank card. A bank card is an open-ended product the place a client can spend as much as a set restrict, carry a steadiness from one month to the subsequent, and reuse the credit score as they repay it. BNPL works in another way: it’s tied to a single buy, mounted in how a lot is repaid and when, and closes as soon as the instalments are completed. Present credit-scoring programs have been constructed round merchandise like bank cards. When these programs encounter BNPL information, they might deal with it like a bank card debt, which may make a accountable BNPL person seem extra financially stretched than they really are.
Credit score-scoring programs additionally have a look at how a lot of an individual’s accessible credit score they’re already utilizing. With BNPL, that quantity could seem increased than it truly is, as a result of the system was not designed to learn short-term instalment merchandise the way in which it reads an ongoing credit score product like a bank card. A client paying each BNPL instalment on time should still look, on paper, as if they’re borrowing greater than they’ll deal with.
For a first-time credit score person shopping for a family equipment by a BNPL supplier, or a younger skilled utilizing an instalment choice at a serious retailer, the problem just isn’t summary. If that client’s credit score rating sits near the extent a lender makes use of to determine whether or not to approve or decline an software, even a modest rating drop attributable to BNPL information may produce an actual consequence: a automobile finance software could also be priced at a better rate of interest, a home-loan software could require further documentation or be declined outright, a retail account restrict could also be lower, or a private mortgage could also be despatched for handbook overview reasonably than permitted.
Why 71% BNPL Uptake Amongst South Africans with Lively Credit score Merchandise Makes Scoring Accuracy a Threat for the Complete System
South Africa’s BNPL market has grown too vital to be handled as a distinct segment checkout challenge. TransUnion’s BNPL Whitepaper says BNPL is changing into related inside South Africa’s credit score ecosystem and should affect entry to credit score, affordability evaluation, lender approvals, rating interpretation and the longer term form of monetary inclusion. The identical report says BNPL customers are youthful, earlier of their monetary journey, concentrated in lower-to-middle revenue bands and infrequently lighter of their participation in formal credit score, with round 17% categorized as new-to-credit and an additional 20% categorized as underserved. South African BNPL suppliers embody Payflex, PayJustNow, MoreTyme and Completely satisfied Pay. Primarily based on that degree of market penetration, any flaw in how BNPL information is learn by scoring programs could now not be a distinct segment challenge affecting early adopters. It may have an effect on hundreds of thousands of debtors, together with the lower-income and thinner-file customers the product was designed to assist.
Family funds are additionally beneath strain at precisely the fallacious time. The TransUnion Q1 2026 Client Pulse Research discovered that 41% of South Africans cited the rising value of on a regular basis items as their prime monetary concern, whereas 35% anticipated to be unable to pay at the least one invoice or mortgage in full throughout the quarter. For customers already stretched, a credit score rating drop attributable to how a system reads their BNPL information, reasonably than how they really repay, may lower off entry to credit score they genuinely want at a time after they can least afford it.
What the NCR’s Resolution to Pause Stay BNPL Knowledge Processing May Imply for Debtors, Lenders and a New Regulation Transferring Via Parliament
South Africa’s credit score regulator has already recognised the danger. The NCR, the federal government physique that oversees how credit score is granted and reported in South Africa, has issued a proper instruction to cease BNPL information from being fed into stay credit-scoring programs till additional evaluation is accomplished. The trade physique representing South Africa’s monetary know-how suppliers, the Fintech Affiliation of South Africa (FINASA), confirmed that BNPL suppliers are submitting information for testing within the meantime. The NCR can also type a Steering Committee to work out what the ultimate reporting guidelines ought to appear to be. How rapidly that committee strikes could decide whether or not the present pause leads to a correctly calibrated system or just delays the identical drawback.
There may be additionally a separate deadline approaching that would have an effect on how a lot time South Africa has to get this proper. A brand new regulation that would set the foundations for the way BNPL suppliers are supervised, the Conduct of Monetary Establishments (COFI) Invoice, was launched in Parliament in April 2026. If the legislative course of advances throughout 2026, the window for getting BNPL scoring guidelines proper earlier than lenders begin appearing on the info could also be shorter than it at the moment seems to be. If that timeline holds, the window for getting BNPL scoring and reporting guidelines proper earlier than lenders begin appearing on the info could also be shorter than it at the moment seems to be.
“Extra information ought to enhance credit score selections, not distort them,” Treasured added. “The instant query is what lenders do within the interim. South Africa wants to repair how BNPL is labelled within the system, check how scoring fashions reply to it throughout various kinds of debtors, and inform customers what is occurring to their rating, earlier than any of this goes stay.”
The longer South Africa takes to ascertain guidelines designed particularly for the way BNPL works, the extra information may accumulate inside scoring programs that weren’t constructed for it, and the more durable it could turn into to separate a system’s response from a borrower’s precise behaviour. Whether or not the present pause turns into a real repair or just a delay could rely on how briskly that committee strikes. Getting that reply proper just isn’t solely a regulatory process. It might be the distinction between a credit score system that opens doorways for extra South Africans and one which quietly closes them on the very individuals it was designed to assist.
About EBC Monetary Group
Based in London’s esteemed monetary district, EBC Monetary Group (EBC) is a worldwide model identified for its experience in monetary brokerage and asset administration. Via its regulated entities working throughout main monetary jurisdictions—together with the UK, Australia, the Cayman Islands, Mauritius, and others—EBC allows retail, skilled, and institutional traders to entry a variety of world markets and buying and selling alternatives, together with currencies, commodities, shares, and indices.
Recognised with a number of awards, EBC is dedicated to upholding moral requirements and these subsidiaries are licensed and controlled inside their respective jurisdictions. EBC Monetary Group (UK) Restricted is regulated by the UK’s Monetary Conduct Authority (FCA); EBC Monetary Group (Cayman) Restricted is regulated by the Cayman Islands Financial Authority (CIMA); EBC Monetary Group (Australia) Pty Ltd, and EBC Asset Administration Pty Ltd are regulated by Australia’s Securities and Investments Fee (ASIC); EBC Monetary (MU) Ltd is authorised and controlled by the Monetary Providers Fee Mauritius (FSC); EBC Monetary Group SA (Pty) Ltd is authorised and controlled by the Monetary Sector Conduct Authority (FSCA).
On the core of EBC are a group of trade veterans with over 40 years of expertise in main monetary establishments. Having navigated key financial cycles from the Plaza Accord and 2015 Swiss franc disaster to the market upheavals of the COVID-19 pandemic. We foster a tradition the place integrity, respect, and shopper asset safety are paramount, making certain that each investor relationship is dealt with with the utmost seriousness it deserves.
Because the Official Overseas Alternate Companion of FC Barcelona, EBC offers specialised companies throughout Asia, LATAM, the Center East, Africa, and Oceania. Via its partnership with United to Beat Malaria, the corporate contributes to world well being initiatives. EBC additionally helps the ‘What Economists Actually Do’ public engagement collection by Oxford College’s Division of Economics, serving to to demystify economics and its software to main societal challenges, fostering higher public understanding and dialogue.
Picture credit score: EBC Monetary Group.
Supply: EBC Monetary Group.
