Is Buy Now, Pay Later On Borrowed Time?

South Africa’s buy-now-pay-later (“BNPL”) sector is facing further scrutiny. The South African Reserve Bank (“SARB”) has reportedly flagged the risk that the growing use of BNPL products may contribute to household financial stress, particularly where consumers have multiple concurrent repayment obligations. BNPL sits in an uneasy space between payments innovation, consumer credit and financial inclusion, which means that its commercial appeal is often matched by regulatory complexity.

It seems that the concern of SARB is not that BNPL is inherently problematic, but rather that it is the it may create risks that look increasingly similar to conventional credit, while parts of the sector may not fall neatly within the current regulatory framework. If a product allows consumers to obtain goods or services immediately and defer payment over time, then the question will inevitably arise whether it should continue to be treated as something meaningfully distinct from more traditional