FINANCE FEATURE: Buy now, regret later

by | Oct 7, 2025 | Featured 3

Buy Now Pay Later services promise a convenient payment method to make shopping easier, but for many, that convenience comes at a hidden cost.

  • BNPL is marketed as interest-free but relies on retailers and penalties.
  • Lower-income consumers use BNPL services due to economic inequality and immediate gratification.
  • BNPL services have hidden costs that pose financial risks.isksto consumers.

It’s currently 01:15 am, and the only light glowing in the room is from a phone screen. Tumelo is mindlessly scrolling through endless digital aisles. Tap, tap, tap – her thumb dancing against the glass screen and then finally, she sees it; her heart beating with jolts of excitement, the one item she’s been searching for – a cow print denim skirt. Her cart is already overflowing with festival gear. The total, a shocking R1274.64 “That’s way too much” she says.

She can’t afford all the items in her cart, but this festival is all everyone’s been talking about, this denim skirt is the last item that would complete her look. And then like a flash, something catches her eye, it was almost as if the whole room had lit up “make shopping easier with 4 interest-free payments.”

At first, she hesitates, but then thinks of how good she would look at the amapiano festival two weeks from now, contemplation swims in her head and finally, she’s convinced herself that it’s harmless. It’s just four payments of R318.66. No interest. No catch.

Or so it seems. Without another thought, she clicks “checkout with PayFlex” before she can even change her mind. But how exactly does this interest-free model work? With major providers like PayFlex, PayJustNow and Mobicred as alternative payment options, it has never been easier to get what you want, when you want it. By just a click of a button, you can get all your heart’s desires now and worry about the bill later.

The Buy Now, Pay Later (BNPL) industry is rapidly growing in South Africa. It offers customers a convenient way to shop by allowing them to purchase items without paying the full amount at once.

BNPL services are marketed as interest-free payments split into weekly or monthly manageable instalments. This is similar to the traditional lay-buy systems, but the only difference is that with BNPL, customers receive purchased products immediately and do not have to wait for it to be fully paid.

While BNPL have convinced customers that you can get whatever you want whenever you want it, at a small price, their interest-free claims raise the million-dollar question: how exactly do these companies generate their revenue?

Image of Payflex zero-interest offer payment plan. Photo: File/Payflex.com

 

Why South Africans flock to BNPL

According to a Research And Markets report, South Africa’s BNPL industry has undergone a significant growth between 2021 and 2024 and is projected to increase further from USD 717.3 million to approximately USD 1.3 billion by the end of 2030.

This growth is attributed to the increasing demand of interest free payment options, particularly as digital payment methods become more popular, especially among the younger consumers.  

This upward trend only highlights the deep-rooted inequalities faced by regular South Africans. In an economy that frequently excludes lower-income consumers, many turn to BNPL providers as a financial lifeline, especially for those unable to pay for essentials up front. These platforms make large purchases feel more manageable.

In addition to the rising cost of living, a large population of South Africans either lack access to traditional credit or have limited financial services available to them.

Professor Gary van Vuuren of the Wits School of Economics and Finance argues that it’s a system that taps into the idea that things will look good in the future, that one will be able to pay their debts in time, “We always misjudge our future obligations – but other things always come up,” he says

He explains that it is a system built on optimism, “humans believe that they will have the money in a few months’ time… but life doesn’t work that way – immediate gratification, that’s what humans love.”

The illusion of “interest-free”

So, how do BNPL providers make their money if they are not charging interest?

First, it starts with the retailer. BNPL provide a service to merchants. These merchants are your everyday retail stores such as Superbalist and Takealot, they partner up with a BNPL provider and pay a small fee every time customers opt for the BNPL option at checkout. This is a simple arrangement that creates a win-win situation where the retailer boosts sales with fewer abandoned carts and the BNPL provider earns a commission.

Research by Stitch shows that customers spend 20-30% more when using Payflex, in fact, 83% of customers say they shop more often when Payflex is available.  

Applying is made deliberately simple, at the point of checkout, you are required to provide your personal details such as your ID number and your debit or credit card information.

Providers then conduct a light credit check to assess if you will be able to pay these instalments when the time comes without digging too deeply into your credit history.

This speedy process is the key to their success, “They don’t want to do a deep credit dive – it costs time and money,” van Vuuren explains.

The consequences

While the promise of no interest is plastered in bold across all BNPL marketing, the real conditions are often buried in the lengthy terms and conditions – a place very few customers look.

For Tumelo, the “no catch” was a promise short-lived. A week after the festival, she received an SMS from Payflex informing her that the R318.66 payment was overdue and that a R95 default fee had been added. “I completely forgot about the payment,” she recalls, “I didn’t even have the money to pay them back when I saw the message.”

The assumption that BNPL services are interest-free makes them seem minimal risk, but a deeper look reveals the hidden costs associated with using these platforms.

According to Professor van Vuuren, many consumers lack the financial education needed to navigate these services. “The average customer probably won’t be very financially literate… these places rely on the fact that people don’t pay on time,” he warns.

With Playflex, their catchphrase is simple: “No interest, no drama”, but what happens when you miss a payment?

When you miss a payment on its due date, Payflex automatically charges a default fee. For its “Pay in 4” payment plan, you are charged R95.00 and for a missed “Pay in 3” payment, the fee charged is R125.00. This default fee is charged weekly for a maximum of three charges until the outstanding balance is paid in full.

Screenshot of Payflex Terms and Conditions. Photo: File/Paylex.com

But that’s not all. If the overdue balance remains unpaid, it starts to result in default interest at 2.00% per month. This happens because the overdue payment effectively reclassifies the initial transaction as an incidental credit agreement under the National Creditors Act (NCA) – additional charges which are hidden from sight.

For those who fail to make payments on time, the consequences can be severe. A missed payment might seem like a minor issue in the moment, but it can leave you in a web of financial entanglements down the line.

So essentially, the real revenue for BNPL companies comes from default and penalty fees from missed payments.

“These companies are going to make people poorer in the long run. They give people the expectation that they can afford things that they actually can’t,” says van Vuuren.

Ultimately, because much of this industry is unregulated, customers do not have the protection of the NCA to back them up if things go wrong.

A final word of caution

While BNPL services claim to be interest-free, the hidden costs are stitched quietly beneath the fabric of a soft cotton blouse or the travel tickets to a beachy holiday in Cape Town – penalties and mounting charges that only reveal themselves after the fact, turning an interest-free purchase into a costly debt.

Before clicking the shiny, appealing button that says, “Pay Later” consider this: what are you really delaying – the cost, or the consequence?

Professor van Vuuren’s advice remains clear: “Make sure that you know the conditions of these contracts.”

While BNPL may seem harmless or even helpful, sometimes reading the fine print is what may save you from a financial trap.

FEATURED IMAGE: Image of online purchase being made with Paylex option and logos of various BNPL services. Photo: Nthabeleng Phayane

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EDITORIAL: Women put themselves first as SA birth rate declines 

by | Aug 10, 2025 | Opinion

South Africa’s falling birth rate is not an accident, it’s a choice as women’s aspirations are reshaping the future. 

South Africa’s declining birth rate is more than just a statistic; it is a powerful indicator of a societal shift, driven by women demanding more for themselves.

According to the latest Mid-Year Population Estimates (MYPE) 2025 report by Stats SA, the Total Fertility Rate (TFR) in 2025 has fallen to an average of 2,21 children per woman, down from its peak in 2008 at 2,78 children per woman on average.  

This downward trend is further supported in a recent study by Microtrends, which states that the South African birth rate for 2025 is 18.50 births per one thousand people, which is a 1.32% decline from 2024’s 18.75 births per one thousand people. 

This decline is not merely a demographic trend, but signals societal transformation. There has been a mental and cultural shift in the attitudes towards parenthood. More and more South African women are choosing to delay or even relinquish having children altogether. 

Research firm Eighty20 attribute this decline to a number of reasons including but not limited to: better access to healthcare and family planning, delayed marriages, and the cost of raising children. Most importantly, women have improved access to education. 

With the scarcity of jobs and rising cost of living, raising a child is becoming increasingly expensive, especially in a country like South Africa where the high youth unemployment rate remains a critical issue.  

It raises a particularly important question: can we truly afford the lives we imagine for ourselves, let alone for the next generation?  

Historically, success for women was defined by marriage and bearing children, but traditional norms are now being challenged. The meaning of success has been redefined for the new generation of South African women.

As women make more informed choices, a new set of priorities is emerging. Many are now putting their education, careers, and personal growth first and pursuing financial independence, which these days is often referred to as ‘chasing the bag’.  

While children are often considered a blessing, it would be irresponsible not to acknowledge the immense responsibility and personal sacrifice that come with raising a child. Parenting is a full-time commitment that often falls disproportionately on women. In a society where support systems are limited, many are questioning the feasibility of bringing a child into the world, not only for themselves but also for the child.  

These cultural shifts are not just unique to South Africa, they echo global feminist movements such as South Korea’s 4B Movement, where women opt out of dating, marriage, sexual relations with men, and having children.  

Although South African women may not fully embrace this approach, the underlying desire for autonomy and personal freedom is an indicator of how traditional norms are being challenged worldwide. 

While it is important to celebrate the growing autonomy of South African women, we must also consider the implications for future generations. According to a report by The Organisation for Economic Co-operation and Development (OECD), declining birth rates often lead to ageing populations and eventually, shrinking workforces. Over time, societies may be faced with strained economic systems and social services such as grants and pension funds.  

Whether women choose to embrace motherhood or not, at the heart of this transformation lies a simple, undeniable truth: women want more for themselves – they want better.  

FEATURED IMAGE: Nthabeleng Phayane, 2025 Wits Vuvuzela Journalist. Photo: File/Paul Botes

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Residents vent their frustrations as City of Johannesburg holds open day for its Accelerated Service Delivery Initiative in Braamfontein  

by | May 2, 2025 | News

Accelerated service delivery mandated by city of Johannesburg mayor in problem areas of Joburg. 

  • Open Day for Accelerated Service Delivery in Region F. 
  • City of Johannesburg spokesperson seeks to reclaim the city. 
  • Public opinion is varied, some are hopeful, while others remain skeptical of the initiative. 

Johannesburg residents aired their frustration at the slow or non-existent service delivery from the City of Johannesburg as city officials held an open day for its Accelerated Service Delivery Initiative at Jorissen Place in Braamfontein on Wednesday April 30. 

The programme which began in the inner city and is now being rolled out to other regions of the city, aims to address service delivery concerns across Johannesburg by involving municipal entities and engaging directly with communities.     

Municipal entities such as City Power and the Johannesburg Metro Police Department (JMPD) were present to engage with the citizens.

  

Municipal officials engaging with the public. Photo: Nthabeleng Phayane
Johannesburg Metro Police Department Vehicles. Photo: Nthabeleng Phayane

City of Johannesburg spokesperson, Nthathisi Madingoane, told Wits Vuvuzela that the project aims to “Reimagine Joburg through the eyes of the residents.” 

Braamfontein residents expressed mixed views.  

Paballo Saohatsi, a local resident complained about frequent water disruptions and power outages. “There is a water issue in Braam, and power outages too.” she said. 

Another resident, Siphesihle Ngubane, a student and small-business owner shared with Wits Vuvuzela his frustrations about the recently recurring power outages in the area. Ngubane was forced to give away stock from his ice-cream business. Though despite the setback, he remains optimistic about the city’s future. “I think it will get better, because I see them here” said Ngubane. 

Lebo Nteso spoke of the tedious process that one must go through to acquire service delivery such as bins. “It’s [just] for show, because we’ve never had such awareness campaigns” she said. 

However, Thembekile Nhlapo, a local resident expressed hope saying, “I think we can trust them to do what they say they are going to do.”  

Even with measures like these put into place, service delivery remains an issue throughout the city. 

FEATURED IMAGE: Municipal officials engaging with the public. Photo: Nthabeleng Phayane

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