Unregulated Buy Now, Pay Later services could push millions of SA consumers into financial ruin
MicroFinance South Africa (MFSA) has warned that the unchecked rise of Buy Now, Pay Later (BNPL) credit services is exposing millions of South Africans to unsustainable debt, hidden costs, and financial exploitation, and is urging regulators to act swiftly.
MFSA CEO Leonie van Pletzen said the largely unregulated system is particularly concerning for low-income workers, young consumers, and an already over-indebted population. “Without urgent intervention, this growing shadow credit system could lead to devastating consequences,” she said.
BNPL lets shoppers pay for products in instalments over a set period, often interest-free and without service fees. While promoted as a modern, convenient payment option, van Pletzen said it is “in reality… credit that is not subject to the core protections of the National Credit Act (NCA)”. MFSA has found individuals stacking multiple BNPL products without affordability checks, credit bureau reporting, or understanding the long-term costs.
As of June, BNPL’s status under the NCA or the Financial Advisory and Intermediary Services Act remains unclear.
The Intergovernmental Fintech Working Group has noted that BNPL currently sits in a regulatory void, with the National Credit Regulator and Financial Sector Conduct Authority each overseeing separate, unrelated laws.
MFSA said BNPL is now being used for essentials such as groceries, utilities, transport, and healthcare — not just luxury purchases. “This signals an alarming dependency on unregulated debt for basic living expenses,” said van Pletzen, warning that consumers often don’t realise they are entering credit agreements due to marketing tactics and lack of formal disclosures.
BNPL platforms can approve up to R30 000 in credit in under three minutes, with some issuing over 100 000 new accounts per month. Approval rates range from 50% to 70%, with penalty fees — capped at around R255 per late transaction — charged weekly.
MFSA has called for BNPL providers to be brought under the NCA, with mandatory affordability assessments, full credit bureau reporting, standardised disclosures, licensing or registration, and access to dispute resolution through an ombudsman.
“South Africa is now at a critical crossroad,” van Pletzen said. “Either allow BNPL to continue growing unchecked, or proactively regulate it to protect consumers and maintain the integrity of the financial system.”
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