Buy Now, Pay Later in Africa: Growth With Guardrails

Buy now, pay later (BNPL) is moving from niche to normal across parts of Africa. Consumers want flexible ways to manage baskets and cash flow, while retailers see higher conversion without adding steps. The question isn’t whether BNPL will grow, but how it grows: with the affordability checks, fraud controls and data visibility that keep outcomes positive for both customers and providers.

In practice, BNPL often builds on openings already created by traditional credit and mobile payments. It meets demand where wallets and ecommerce have lowered barriers, then extends access through lighter-touch onboarding and transparent instalments. That opportunity is real, but it needs the right safeguards to last.

Smartphone penetration and digital retail continue to reshape purchasing habits. Younger and thin-file consumers, in particular, value speed and predictability over revolving credit. For retailers, BNPL can lift approval rates and average order values without adding friction to checkout. The growth drivers are in place; the controls must keep pace.

BNPL’s ease can mask complex risk. Without shared visibility, providers may approve customers who already hold multiple, active instalment plans across the market. Affordability checks vary, data is fragmented and early warning signals can be missed. Fraudsters also probe lighter-touch journeys — testing identity, device and behavioural weak points. Left unaddressed, these gaps add operational costs and slow sustainable growth.

Consumer Pulse survey data from 2024–2025 shows that BNPL use in South Africa is steadily increasing. However, the proportion of consumers unable to pay their BNPL obligations has nearly doubled. While adoption presents clear market opportunities, the rising non-payment rate highlights growing financial stress among consumers, particularly during periods of high household expense.

Key insight: BNPL can drive revenue and expand access to credit, but lenders need robust risk management and affordability assessments. Solutions like TransUnion CreditVision® Scores, and TransUnion Income Estimator™ can help assess affordability and repayment capacity which in turn can reduce defaults.

Kenyan survey data shows how mobile-first journeys and wallet usage shape how BNPL is discovered and used. Repayment behaviour and engagement patterns differ from South Africa, so copy-and-paste strategies fall short. Models, signals and education work best when tuned to local payment habits and data availability.

Responsible growth blends three disciplines that reinforce each other:

• Affordability and income signals to understand capacity to repay —  at onboarding and throughout the relationship
• Fraud controls that layer identity, device and behavioural signals — applying step-up only where risk rises
• Portfolio monitoring and consumer education to intervene early and support positive outcomes

TransUnion brings data, analytics and decisioning that enable BNPL providers to approve more of the right customers and better manage risk across the lifecycle.

Our trended credit data through CreditVision® Link supports affordability models with a fuller view of consumer trajectories, not just snapshots. Income Estimator can help estimate income where documentation is limited, improving decisions without adding heavy friction. Fraud prevention services help identify and block high-risk journeys earlier, and CreditView^TM supports consumer credit education and engagement at scale.

BNPL often operates in a regulatory grey zone. In many African markets, it is not formally classified as credit, which creates visibility gaps where lenders cannot see consumers’ full obligations. This raises the risk of loan stacking—when borrowers take out multiple loans across different providers without sufficient affordability checks.

As a result, consumers may become over-indebted, and because BNPL is not always perceived as “real credit,” repayments are often deprioritised in favour of essentials like rent, utilities or food.

TransUnion Consumer Pulse survey data from South Africa highlights this tension:

• Mashonisa loans and store accounts show rising non-payment, with BNPL defaults on the rise, too.
• Utilities and internet payments are becoming harder to pay, suggesting broader financial pressure.

In Kenya:

• BNPL defaults remain low, but car loans and credit cards show increasing financial stress.
• Essentials like rent, utilities and internet are prioritised, reflecting responsible household management.

These patterns show that there is a clear need for responsible lending, strong data visibility and consumer education.

Start by mapping where visibility is thin and friction spikes. Calibrate approval and limit strategies by market, channel and basket type. Introduce post-decision monitoring so you can spot changes in risk early and respond with right-sized actions — from reminders to limit adjustments. Keep your consumer messaging plain and practical to set clear expectations from the first instalment.

BNPL works best when providers, lenders, retailers and regulators collaborate — which is why TransUnion advocates for SACRRA (South African Credit and Risk Reporting Association) membership. Shared standards and data improve visibility, reduce blind spots and protect consumers while keeping the purchase experience simple. With the right guardrails, the sector can expand access and support growth without trading away control.

Speak to your TransUnion representative to review BNPL affordability and fraud controls for South Africa and Kenya. We’ll help you identify practical steps that lift approvals responsibly and reduce losses without adding friction.