The BNPL Scourge: How "Buy Now, Pay Later" is Enslaving South African Consumers
The "buy now pay later" (BNPL) model has taken South Africa by storm, with companies peddling this snake oil to unsuspecting consumers. And the CEO of Payflex, Bruce McIntosh, is laughing all the way to the bank.
According to McIntosh, the industry has seen a whopping 100% year-on-year growth, with Payflex alone processing over R7.5 billion in transactions since its inception six years ago. But at what cost?
Consumers are being lured into a cycle of debt, with BNPL platforms charging them exorbitant fees for the privilege of buying now and paying later. And it’s not just the fees that are the problem – it’s the fact that these platforms are using sophisticated data analytics to manipulate consumers into making impulse purchases they can’t afford.
The industry is booming, with more players entering the market and consumers being enticed by the promise of instant gratification. But the reality is that BNPL is a recipe for financial disaster, with consumers being saddled with debt and interest rates that are spiraling out of control.
And don’t even get me started on the credit history aspect. BNPL platforms are using credit scores to determine who can and can’t access credit, with those who are deemed "creditworthy" being offered larger credit limits and those who are deemed "high-risk" being offered smaller credit limits. It’s a system that perpetuates inequality and discrimination.
The government needs to step in and regulate the BNPL industry before it’s too late. Consumers deserve better than to be exploited by companies that are more interested in making a profit than in helping them manage their finances.
The Consequences of BNPL
- Consumers are being lured into a cycle of debt, with BNPL platforms charging them exorbitant fees for the privilege of buying now and paying later.
- The industry is booming, with more players entering the market and consumers being enticed by the promise of instant gratification.
- BNPL platforms are using sophisticated data analytics to manipulate consumers into making impulse purchases they can’t afford.
- The industry is perpetuating inequality and discrimination, with those who are deemed "creditworthy" being offered larger credit limits and those who are deemed "high-risk" being offered smaller credit limits.
- The government needs to step in and regulate the BNPL industry before it’s too late.
The Future of BNPL
- The BNPL industry is expected to continue growing at a rate similar to the retail sector in general.
- The South African economy is expected to stabilize, resulting in a more relaxed consumer who is open to spending.
- The industry is poised for growth, with more service providers entering the market.
But at what cost?
