When should you offer Buy Now Pay Later? What the consumer data shows

Buy Now Pay Later is a genuinely useful tool for the right merchant in the right context. It’s not a universal conversion booster. Understanding when it can be leveraged to drive measurable value helps merchants decide whether to enable it, how to position it and where in the checkout flow it should appear.

Our upcoming How South Africans Shop in 2026 report, which surveyed thousands of South Africans and drew on transaction data from the Stitch platform, provides a detailed picture of who is actually using BNPL, for what and why.

BNPL adoption is accelerating, but it's still concentrated

38.9% of South African consumers tried BNPL for the first time in the past 12 months. Among credit-active consumers specifically, 71% already use it at some frequency, with 16.7% using it frequently and 43.9% sometimes. The South African BNPL market is projected to reach $1.11 billion in 2026, with the broader Africa-wide market expected to hit $16.8 billion by 2029.

However, the Stitch 2025 Consumer Payments Report revealed that as of 2025, 55% of the broader population had never used BNPL. The gap between overall population and credit-active consumers shows that BNPL adoption is concentrated among digitally active, credit-engaged South Africans. This is a segment that is growing quickly, but not yet the majority.

This has direct implications for which merchants stand to benefit most.

Who is using BNPL in South Africa?

BNPL engagement is highest among the Realised Middle (consumers with household incomes of R25,000 to R50,000), at 69.6%. The Mass Market shows the lowest engagement at 54.1%, while the Elite segment sits at 62.9% but with higher "rarely" rates, suggesting occasional rather than habitual use.

This is a meaningfully different profile from the lower-income segment that traditional lay-by models have historically targeted. The BNPL user is not necessarily someone who cannot afford the full purchase. The 2026 report data shows that 58% of BNPL users cite convenience as their primary reason for using BNPL, and 49% cite the interest-free nature of the product. These indicate cash-flow management decisions rather than purely reliance on credit.

That context is important for how merchants position BNPL. It performs best when presented as a flexibility and convenience option, not an affordability lifeline for customers who cannot otherwise complete the purchase.

There is, however, a segment of the market for whom BNPL plays a different and deeper role. In an upcoming episode of the Between the Seams podcast, Stitch President and Co-founder Junaid Dadan and Ashish Aggarwal, Partner at PayPal Ventures, explored why BNPL in South Africa looks fundamentally different than it does in Western markets. For millions of South African consumers who are creditworthy but data-poor, BNPL functions as a bridge into the formal financial system: it’s a first verified transaction that opens access to other financial products. As Dadan put it, it’s not just about splitting a payment. It’s about giving consumers with no formal credit history a way to prove they can be trusted.

For merchants, this means BNPL integration can serve a dual purpose: driving conversion today while helping build a more financially included customer base over time.

What are they buying?

BNPL usage is heaviest for electronics (the top category by response volume) and clothing and fashion, followed by home and furniture, where higher ticket values make instalment logic intuitive. Health and beauty comes fourth, followed closely by groceries, which is a notable development. The emergence of groceries as a top-five BNPL category signals a meaningful shift from occasional big-ticket tool to everyday payment method.

For merchants in lower-value categories, this is worth watching, but the conversion argument for BNPL is still most compelling where cart values are higher. The basket value effect is consistent: merchants offering BNPL see higher average cart sizes, because the method enables customers to complete purchases they might otherwise downsize or defer.

When BNPL has the most impact

Based on the available data, BNPL delivers the clearest return in three scenarios.

• High-value items with purchase hesitation: When a customer reaches checkout with a cart value above roughly R1,000 to R1,500 and hesitates, BNPL can resolve the moment. The option to pay over instalments can convert a browse-and-abandon into a completed purchase. Merchants that configure BNPL to display only above a minimum cart value see more focused adoption and cleaner conversion data.
  
  
• As a fallback when a primary payment fails: One of the highest-impact deployments of BNPL is as a fallback option. When a card payment is declined due to insufficient funds, a temporary hold or another bank-side reason, presenting BNPL immediately can recover the transaction. The Stitch 2025 Consumer Payments Report shared that approximately 71% of South African shoppers abandon a purchase entirely when their payment fails. BNPL as a fallback gives the customer a path forward at precisely the moment they are most likely to drop off.
  
  
• For omnichannel retailers who can offer it across channels: The 2026 report surfaces a finding the original BNPL conversation has largely missed: 48.7% of South African consumers want BNPL available both online and in-store. Only 15% prefer online-only. Omnichannel BNPL is in demand, and there is a competitive gap for merchants who can close it. Retailers who offer BNPL in-store as well as online are serving how consumers actually want to shop.

When BNPL is unlikely to add much value

BNPL is less likely to drive meaningful conversion improvement in a few contexts.

• For low-value, high-frequency transactions, such as fast food, transport, small convenience purchases, the instalment model does not match the purchase psychology. Consumers do not want to manage a repayment schedule for a R150 lunch. Offering BNPL in these contexts creates checkout clutter without conversion benefit. (The grocery exception is worth watching, but even there the BNPL use case is more likely tied to a larger basket shop than a daily spend.)
  
  
• There is also a perception problem to manage. Our 2026 report found that 37% of non-BNPL users avoid it specifically to avoid debt, and qualitative responses captured the tension directly. One consumer participant said: "When I hear buy now, pay later, what comes to mind? Problems." For certain customer segments, BNPL can carry associations that undermine trust rather than build it. Positioning and presentation are important.

How to deploy BNPL effectively

Merchants who see the best results from BNPL use it precisely rather than universally. Practical configuration choices include:

• Setting a minimum transaction value for BNPL to display (typically R800 to R1,500 depending on category)
• Surfacing BNPL as a fallback option immediately after a card or pay by bank failure
• Positioning BNPL clearly in the payment selection screen with instalment amounts shown upfront
• Enabling it for in-person payments as well as online checkout if your customer profile warrants it
• Testing seasonal placements during peak periods like Black Friday, festive season and back-to-school shopping, where the affordability-convenience combination is most relevant and average basket values are higher.

Stitch BNPL supports all of these configurations. If you want to understand whether your business profile is a good fit, or how to configure BNPL to maximise the return, get in touch with the Stitch team.

FAQs

Does BNPL work for all types of merchants?

No. BNPL delivers the clearest results for merchants selling mid-to-high value items in categories such as electronics, clothing and fashion, home and furniture, health and beauty and sporting goods. For low-value, high-frequency transactions it generally adds checkout complexity without a meaningful conversion benefit. That said, the Stitch How South Africans Shop in 2026 report found groceries entering the top five BNPL categories, suggesting the category is broadening, so merchants outside traditional BNPL verticals should at minimum evaluate whether their customer profile fits.

What transaction value does BNPL work best above?

Based on consumer behaviour data, BNPL tends to drive the most meaningful conversion improvement for transactions above approximately R800 to R1,500, depending on category. Merchants typically configure BNPL to display only above a minimum cart value to keep adoption focused.

Can BNPL help recover failed payments?

Yes. Configuring BNPL as a fallback option after a card or pay by bank failure is one of its highest-impact use cases. The Stitch 2025 Consumer Payments Report found that approximately 71% of South African shoppers abandon a purchase entirely after a payment failure, making the moment of decline one of the highest-leverage points in the checkout flow.

Who uses BNPL in South Africa?

According to the Stitch How South Africans Shop in 2026 report, BNPL engagement is highest among the Realised Middle income segment (R25,000 to R50,000 household income) at 69.6%. The primary reason for using BNPL is convenience (58%), not inability to pay — which has direct implications for how merchants should position it at checkout.

Should I offer BNPL in-store as well as online?

The data makes a strong case for it. The 2026 report found that 48.7% of South African consumers want BNPL available both online and in-store. Only 15% prefer online-only. For retailers with physical locations, offering BNPL exclusively online is leaving demand unmet at the point of sale.

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