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How South Africa’s Fintech Industry Is Driving Financial Wellness Through Responsible BNPL Innovation
- Rising costs are pushing South Africans to seek smarter ways to manage money. BNPL offers flexible, low-risk relief for monthly budgets.
- Responsible BNPL isn’t just a payment method; it’s a financial wellness tool.
- When used responsibly, access to interest-free instalments and transparency help consumers avoid high interest or unaffordable debt and build better habits.
As economic pressure mounts and the cost of living continues to rise, South Africans are seeking new ways to balance their monthly budgets without falling deeper into debt. Within this landscape, Buy Now, Pay Later (BNPL) models are rapidly reshaping how consumers approach spending, offering flexibility and access while encouraging responsible money management.
Industry leaders agree that when used correctly, BNPL can be more than a payment tool; it can be a gateway to financial wellness, empowering consumers to make informed, controlled spending decisions that support long-term stability.
“Financial wellness goes beyond survival,” says Mladen Čolić, Head of Fintech at TransUnion South Africa. “It’s about giving consumers visibility into their financial behaviour and the tools to make better decisions. Responsible BNPL use can play a meaningful role in that journey, helping people manage their cash flow, avoid high cost or unmanageable debt, and build a foundation for long-term financial stability.”
From Financial Stability to Financial Wellness
The most recent TransUnion Q4 2025 Consumer Pulse Study shows that while South African households remain under financial pressure, signs of financial adaptation are emerging. In Q4, 48% of consumers reported that their household finances were better than planned, yet 36% anticipated missing at least one bill or loan repayment, highlighting the continued strain many households face. In response, 51% of consumers reported cutting discretionary spending, while others adjusted budgets and prioritised longer-term financial stability. Within this cautious environment, more consumers are turning to flexible digital credit options like BNPL which, when used responsibly, can offer a manageable form of short-term borrowing to help navigate ongoing affordability pressures.
According to data from Payflex, the South African BNPL market Compound Annual Growth Rate (CAGR) is greater than 80% since 2022, with usage particularly strong in fashion, beauty, and consumer electronics categories. E-commerce platforms continue to drive adoption, and BNPL transactions will account for an estimated R25 billion in annual retail spend by 2026, highlighting its growing role in the formal retail economy.
This shift reflects an evolution in how consumers think about money. Financial stability is about meeting immediate needs, keeping bills paid and food on the table while financial wellness goes further, focusing on sustainable, informed financial behaviours that build confidence and resilience over time.
How BNPL Supports Smarter Spending
BNPL allows consumers to purchase goods or services and repay them over a short, fixed instalment period, typically three or four payments at zero interest when paid on time, offering a structured alternative to other forms of short-term credit. For some consumers, avoiding revolving debt allows them to plan purchases more effectively and smooth out cash flow without the burden of high-interest credit.
“BNPL isn’t about fuelling more debt,” says Tracey-Lee Zürcher-Campbell, Chief Marketing Officer at Payflex. “It’s about giving consumers flexibility and predictability, helping them manage their cash flow responsibly while avoiding the pitfalls of high-interest credit. When used correctly, BNPL can support everyday financial stability and contribute to broader financial wellness.”
She adds that this level of transparency is key to consumer trust: “South Africans are increasingly discerning about the financial tools they use. They want products that help them live better within their means, not overextend them. BNPL works when it’s built around clarity, discipline, and accountability.”
Data, Discipline, and Wealth Creation
Responsible BNPL models, supported by data analytics, affordability checks, and consumer education are essential to keeping the category sustainable. For many, these tools also offer a path toward financial inclusion.
Encouraging on-time repayments and transparent data sharing enables BNPL providers to help consumers build a positive payment history, strengthening their financial reputation over time. “When BNPL data is shared responsibly, every on-time payment becomes a useful indicator of positive financial behaviour,” says Čolić. “These data points help build a more complete view of a consumer’s financial profile, supporting greater access and accountability over time.”
As South Africa looks to expanding regulation to support BNPL, the financial sector is showing growing alignment around the principles of transparency, affordability, and responsible innovation. From credit bureaus and FinTechs to retailers and regulators, the shared goal is to ensure that digital credit tools enhance rather than undermine consumer wellbeing.
“The FinTech industry has a collective responsibility to innovate with purpose,” says Zürcher-Campbell. “That means designing products that empower South Africans to make better financial decisions, not just more transactions. When people understand and control their financial choices, they can move from survival to real wellness.”
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South Africans Show Determined Optimism as They Adapt to Financial Pressures
- 72% South Africans say they feel positive about their financial outlook for the next 12 months, showing resilience even as the cost of living remains high
- Access to credit continues to shape financial confidence, with 91% viewing it as key to achieving their goals, though fewer than half (42%) believe they can access it easily
- Online scams remain widespread, with 59% of consumers reporting recent fraud attempts, particularly phishing, vishing and gift card schemes
South African households are showing signs of meaningful financial adaptation amid ongoing cost pressures, according to TransUnion’s latest Q4 2025 Consumer Pulse Study. While inflation and affordability challenges persist, consumers are becoming more intentional in their financial management, tightening budgets, prioritising savings, and building greater digital and financial awareness.
“Consumers are entering 2026 with a renewed sense of financial discipline,” said Ayesha Hatea, director of research and consulting at TransUnion South Africa. “We’re seeing households make more deliberate choices, reducing non-essential spending, paying down debt and preparing for the future. This speaks to a financial confidence grounded in awareness and adaptability.”
Financial Adaptation in a High-Cost Environment
Nearly half (48%) of South Africans said their household finances were better than planned in Q4 2025, a sign of growing stability in an economy still defined by high living costs. Yet, 36% of consumers anticipate being unable to meet at least one bill or loan payment in full, revealing the continued strain on affordability.
In response, many households are taking deliberate steps to manage their finances. Half have reduced discretionary spending on non-essential activities such as dining out, entertainment, and travel, while more than a third (34%) have cancelled subscriptions or memberships. At the same time, 38% of consumers plan to increase their contributions toward retirement savings or investments, 35% are accelerating debt repayments, and 27% are setting aside more in emergency funds or stokvels.
These actions suggest that South Africans are not merely reacting to economic pressure but are intentionally strengthening their financial resilience. “Consumers are demonstrating a more strategic approach to money management,” said Hatea. “They’re preserving stability today while laying the groundwork for tomorrow.”
Younger Optimism Meets Experienced Caution
Generational insights reveal that financial resilience takes on different forms across age groups. Younger consumers, particularly Gen Z (18-28 years) and Millennials (29-44 years), tend to be the most optimistic about their financial future and are also the most likely to apply for new credit within the next year, with 42% and 39% expressing this intent, respectively.
In contrast, Gen X (45-60 years) and Baby Boomers (61+) demonstrate a more cautious approach, with only 33% and 9% likely to seek new credit, instead prioritising debt reduction and savings. Spending patterns further illustrate this divide: younger consumers plan to increase their spending on digital services such as internet and other discretionary activities like dining out or travel, while older generations indicate they will prioritise boosting retirement funds and strengthening emergency savings in the coming months.
Credit Access and Inclusion
Credit remains a vital tool for long-term financial mobility, with 91% of South Africans recognising its importance in achieving their financial goals. Yet, access to credit is uneven: only 42% feel they have adequate access, while 33% believe they do not. Despite this strong demand, just 36% plan to apply for new credit or refinance existing debt over the next year, with credit cards (30%), personal loans (28%), and car loans (20%) among the most popular products.
However, 44% of those who considered applying ultimately decided against it, citing barriers such as high borrowing costs (33%), fear of rejection due to their credit history (26%), and concerns over income or employment (24%).
“These findings highlight a need for more inclusive and transparent lending models,” said Hatea. “Consumers believe that a broader use of alternative data, such as rental or buy-now-pay-later payment histories can help extend fair access to credit while supporting responsible borrowing.”
Digital Fraud Threats Drive Demand for Simplified Protection Tools
Digital fraud continues to pose a significant threat to South Africans, with 59% targeted in Q4 and 12% falling victim. The most commonly reported schemes include money or gift card scams (32%), vishing (30%), phishing (29%), and smishing (27%). Despite these threats, 46% of consumers successfully detected and avoided fraud, reflecting growing vigilance. Among those affected by data breaches, 42% changed their passwords, 35% checked accounts for unauthorised activity, 30% closed compromised accounts, and only 16% signed up for identity monitoring.
In the past two months, reacting to security concerns, 58% changed passwords, 23% enabled multi-factor authentication, and 37% checked their credit reports. Yet, many remain unsure how to respond: 53% of those who took no action cited uncertainty about the steps to take, while 22% felt overwhelmed by cybersecurity information.
Empowered and Financially Aware Consumers
Financial awareness among South Africans continues to rise, with 93% recognising the importance of credit monitoring. Engagement with credit reports is also increasing, with 31% checking monthly, 16% weekly, and 8% daily.
Nearly half of consumers believe their credit score would improve if alternative data, such as rental payments or buy-now-pay-later histories, were considered, particularly among younger generations.
“This growing awareness of credit health is encouraging,” said Hatea. “Consumers are becoming more proactive and engaged, and that creates a powerful opportunity for businesses and lenders to support them with relevant, transparent financial tools.”
Building Financial Confidence for the Future
The Q4 findings paint a picture of a nation adapting with purpose, cautious but confident, pragmatic yet forward-looking. As South Africans continue to manage affordability pressures, the emphasis on long-term financial planning, inclusion, and protection is reshaping how consumers engage with the financial system.
“Resilience has become the defining characteristic of South African consumers,” said Hatea. “They’re not waiting for conditions to change, they’re taking control of their financial journeys, showing that confidence and caution can coexist.”
Consumers can get their free annual credit report from TransUnion here.
Notes to Editors: An online survey of 992 adults in South Africa was conducted between 25 September and 9 October 2025 by TransUnion with Dynata, using an online panel across desktop, mobile, and tablet. The survey, administered in English, included respondents aged 18 and older from all regions, with quotas applied to ensure demographic representation by age, gender, household income, race, and region. Generational groups were defined as follows: Gen Z (18–28), Millennials (29–44), Gen X (45–60), and Baby Boomers (61+).
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South Africa’s Auto Market Shows Signs of Recovery as Used Vehicle Demand Rises
- Used vehicle financing outpaces new car financing, with a ratio of 1.56 to 1 as affordability remains a key driver
- New vehicle finance agreements grow by 12.7% YoY, despite economic uncertainty
- South Africa reaches a milestone of 1,000+ battery electric vehicle (BEV) sales in 2024, with PHEV and HEV sales growing over 60% YoY
The latest TransUnion South Africa Vehicle Pricing Index (VPI) for Q4 2024 reveals a cautiously optimistic outlook for the country’s automotive sector, with improving economic conditions encouraging consumer confidence while affordability challenges continue to shape purchasing decisions.
Key insights from the report indicate a continued shift towards used vehicles, with financing for pre-owned vehicles outpacing new car financing at a ratio of 1.56 to 1, up from 1.23 in Q4 2023. Meanwhile, new vehicle prices increased by 1.7% due to supply chain constraints and production costs, while used vehicle prices declined by 2.8%, making them a more attractive option for cost-conscious buyers.
Despite these challenges, new vehicle finance agreements grew by 12.7% year-over-year (YoY), with Gen X and Millennials accounting for 67% of new agreements*.
“South Africa’s automotive sector is navigating a complex landscape, balancing economic improvements with persistent affordability challenges,” says Marcia Mayaba, Sales Vice President, Auto Information Services at TransUnion South Africa. “The demand for used vehicles continues to grow, while we’re also seeing an increasing shift towards alternative financing and ownership models, such as leasing and car subscriptions, particularly among younger consumers.”
Used Vehicles Dominate, While New Car Market Seeks Stability
The Q4 2024 VPI report highlights a strong preference for used vehicles, with financing activity significantly outpacing new vehicle sales. This shift is largely driven by affordability concerns, as inflationary pressures and high vehicle prices continue to impact consumer purchasing decisions.
The used-to-new financing ratio increased to 1.56 in Q4 2024, reflecting a clear trend toward more budget-friendly alternatives. At the same time, new vehicle registrations grew by 14.4% YoY, supported by improved economic conditions and rising consumer confidence.
The Future of South Africa’s Auto Market: EV Growth and Digital Financing
Looking ahead, the report highlights the rising potential of electric vehicles (EVs) in South Africa, signalling a significant shift in consumer interest and market dynamics. The country reached a milestone of over 1,000 battery electric vehicle (BEV) sales in 2024, a small but significant step in a market still dominated by petrol and diesel vehicles. While EVs represent a fraction of total sales, the 60% year-over-year growth in hybrid (HEV) and plug-in hybrid (PHEV) sales signals a gradual shift in consumer interest toward more sustainable options.
The introduction of more affordable EV models priced under R1 million, such as the BYD Dolphin and Seal, is expected to accelerate adoption in 2025, making EV ownership more accessible to a broader segment of the market. However, affordability remains a key barrier, with high upfront costs and concerns around charging infrastructure limiting mainstream adoption.
“EV adoption in South Africa is gaining momentum, but for this growth to be sustained, industry players must collaborate to make ownership more accessible," says Mayaba. "With the right financial products, infrastructure expansion, and increased consumer awareness, EVs have the potential to reshape South Africa’s automotive landscape in the years to come.”
Financing Trends and Alternative Ownership Models Gain Momentum
The report also reveals an evolving vehicle financing landscape, with leasing, subscriptions, and rent-to-buy agreements gaining traction as consumers seek more flexible and cost-effective solutions.
For the first time, the Q4 2024 VPI report explores the impact of e-Hailing, leasing, and car subscriptions on the South African auto market. While outright vehicle ownership remains dominant, alternative mobility solutions are becoming increasingly relevant. The report indicates that leasing and subscription-based models are particularly appealing to Millennials and Gen Z consumers, who prioritise affordability and flexibility over long-term ownership commitments.
Additionally, e-Hailing continues to serve as a supplementary transport solution rather than a direct competitor to vehicle ownership. According to recent data from inDrive, an international ride-hailing service, 21.1% of South Africans make us of e-hailing services, reflecting the growing popularity of these transportation alternatives. However, the majority of users still aspire to own a vehicle in the long term. To address affordability constraints and credit access challenges, leasing and rent-to-buy options are emerging as viable alternatives, offering consumers flexible solutions that align with their financial situations.
While lower-value finance agreements (under R250,000) declined, a growing share of financed vehicles now falls within the R250,000 to R750,000 range. This shift suggests that while affordability remains a concern, consumers are prioritising flexible financing solutions and adjusting their purchasing behaviour to align with available credit and economic conditions
“The traditional model of vehicle ownership is evolving,” adds Mayaba. “While outright ownership remains a key aspiration, younger generations are increasingly exploring flexible mobility solutions that align with their financial realities and lifestyle preferences.”
As South Africa’s automotive sector continues to evolve, the interplay between affordability, alternative financing models, and emerging technologies like EVs will shape its future. While used vehicles remain the preferred choice for many consumers, the growth in digital financing and the introduction of more accessible EV models signal an industry on the brink of transformation. Collaboration among industry players, financial institutions, and policymakers will be key to ensuring sustainable growth and greater accessibility for all consumers. With the right innovations and strategies, the sector is well-positioned to adapt to changing market dynamics and drive long-term success.
Read the latest TransUnion VPI Q4 2024 report here.
ENDS
Notes to Editors:
* Gen X (born 1965-1980), Millennials (born 1981-1996) and Gen Z (born 1997-2012)
The TransUnion South Africa Vehicle Pricing Index (VPI) tracks vehicle pricing trends across new and used markets, integrating data from SACRRA and industry-leading sources.
For more information, visit: www.transunion.co.za
South Africa’s Lenders Adopted Prudent Risk Strategies to Drive Growth in Q4 2024
- Card issuers rewarded performing existing cardholders with credit limit increases, but offered lower credit limits to new cardholders
- Consumers increasingly turned to non-bank lenders for personal loans
- Vehicle loan originations increased for the second consecutive quarter, indicating optimism for the sector
According to TransUnion’s (NYSE:TRU) Q4 2024 South Africa Industry Insights Report, the country’s credit card issuers have adapted their acquisition strategies to enable prudent growth, while effective risk management has led to a decline in account-level delinquencies. During Q4 2024, credit card issuers reduced the average credit card limit on new accounts by 3.9% year-over-year (YoY), while at the same time they increased credit limits on existing credit cards[1] by 5.0%.
The limit increase observations were prominent among prime plus consumers (+4.1% average credit limit increase) and super prime[2] consumers (+1.8%). As a result of higher line access and consumers continuing to leverage credit cards to meet financial and transactional needs, total outstanding balances rose by 7.8% YoY. These insights are echoed in TransUnion South Africa’s Q4 2024 Consumer Pulse Report, where 13% of consumers responded that they had increased their usage of available credit.
An improving performance picture, as observed since Q2 2022, continued as delinquencies (measured as accounts 90 days or more past due) decreased by 34 basis points (bps) YoY during Q4 2024. This trend shows that South African consumers have been able to maintain their credit card payment obligations, while leveraging their cards to navigate the continued high cost of living that has put pressure on disposable income.
“Lenders who are sustaining growth and profitability are drawing on enhanced risk attributes to stimulate a greater share of spend and wallet by identifying consumers who are likely to use credit lines judiciously,” said Lee Naik, CEO of TransUnion Africa. “At a time when new account acquisition is costly, enabling lower-risk consumers to re-engage with their inactive cards, or to extend the use of existing cards, will encourage prudent growth and enable customer loyalty.”
Personal loan lenders target younger borrowers
While personal loan originations from traditional banks declined by 6.2% YoY in Q4 2024, personal loan originations from non-bank lenders increased by 13.9% YoY. Non-bank personal loan originations among Gen Z[3] consumers grew by 48.5% YoY, with this cohort accounting for 15.5% of all non-bank originations.
Non-bank personal loan originations increased YoY across all risk tiers (except for the super prime risk tier, where originations declined by a marginal 1.0% YoY), with the greatest increase seen among prime borrowers (16.1%). However, bank personal loans declined across all risk tiers YoY, except for subprime, where they increased by 6.0% YoY.
Banks are expanding their personal loan offerings to a greater proportion of subprime borrowers. Among bank personal loans, the share of subprime borrowers increased from 53% in Q4 2023 to 58% in Q4 2024, with the share of near prime borrowers remaining consistent across the year. There were minimal YoY fluctuations across the remaining risk tiers. In contrast, the distribution across risk tiers for non-bank personal loans remained consistent over the last two quarters of 2024.
The personal loans market continues to be dominated by younger borrowers, although the total share of originations by borrowers aged 45 and younger did decline marginally in 2024. Seventy-five percent of bank personal loans were granted to Gen X and Millennial customers during Q4 2024, down from 78% one year prior, while 70% of non-bank personal loans were granted to the same age group in Q4 2024, compared to 72% one year prior. At the same time, both lender types are growing their portfolio among the youngest Gen Z borrower group, with 19% of bank personal loans going to Gen Z borrowers in Q4 2024, up from 16% one year prior, and 16% of non-bank personal loans going to these consumers in Q4 2024, up from 12% one year prior.
With respect to credit performance, bank personal loan account-level delinquencies at 90+ days past due dropped by eight bps YoY to 26.6%, while non-bank personal loan delinquencies increased by 452 bps to 40.6%.
“Non-bank personal lenders have a more tolerant risk appetite than banks, and they are responding positively to market demand across age groups and risk tiers,” says Naik. “Lenders that maintain rigorous risk assessment practices that enable greater and earlier prediction of risk, offer education on how to use and manage credit, and empower younger consumers to build their credit profiles, will ensure the continued sustainability of the personal loan market.”
Vehicle loan market continued its recovery path
The vehicle loans market showed encouraging signs of continued growth, as origination volumes increased by 9.6% YoY, and average new loan amounts grew by 1.4%. The greatest growth in originations was observed among Gen Z consumers, where originations grew by 27.9%, although their share of total new finance agreements remains relatively low compared to older age groups. This is the second consecutive quarter in which total vehicle loan originations grew YoY, with the last increase in origination volumes before these two increases having been in Q3 2022. Given the 0.25 bps decrease in interest rates as of November 2024 and a positive outlook for consumer confidence, the vehicle loan market is expected to continue this recovery trend.
These positive trends were also evident in the Q4 2024 TransUnion South Africa Vehicle Pricing Index, that revealed a growing share of financed vehicles within the R250,000 to R750,000 price range. This shift suggests that, while affordability may still be a concern, consumers are prioritising flexible financing solutions and adjusting their purchasing behaviour to align with available credit and economic conditions.
“While the two recent interest rate decreases were just 25 basis points each, the significant increase in new vehicle loan originations indicates that South Africans are becoming more optimistic about their financial futures,” says Naik. “While vehicle ownership is aspirational for many individuals, it’s also the key to unlocking growth for entrepreneurs, and the owners of micro and small enterprises, all of whom are the engines of economic growth in South Africa.
“As part of our drive to expand financial inclusion, TransUnion has included a wide range of alternative data into our scoring solutions, so that more South Africans are more visible in our risk scoring models, in turn creating the platform for them to access finance for the first time.”
Table 1: Key South African Credit Market Metrics (Q4 2024 vs Q4 2023)
|
Product |
YoY origination growth |
Serious account-level delinquency rate* |
YoY basis points (bps) change in delinquency rate |
| Credit card |
5.6% |
12.0% |
-33 bps |
| Bank personal loan |
-6.2% |
26.6% |
-8 bps |
| Non-bank personal loan |
13.9% |
40.6% |
452 bps |
| Clothing accounts |
-4.0% |
26.4% |
-143 bps |
| Retail instalment |
14.9% |
27.5% |
-204 bps |
| Retail revolving |
11.9% |
14.5% |
-500 bps |
| Home loans |
-13.2% |
7.1% |
26 bps |
| Vehicle finance |
9.6%% |
4.8% |
13 bps |
*Account-level serious delinquency rate, measured as a percentage of accounts three or more months in arrears
- [1] Credit card accounts that are currently open and active in the portfolio.
- [2] Scores are based on TransUnion’s CreditVision® generic scoring methodology. Risk distribution key: subprime (0-625), near prime (626-655), prime (656-695), prime plus (696-720), super prime (721-999).
- [3] TransUnion age distribution: Gen Z (Born 1995 – 2010); Millennials (Born 1980-1994); Gen X (Born 1965-1979); Baby Boomers (Born 1946-1964